Zoompass Holdings, Inc. - Annual Report: 2019 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ZOOMPASS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File No. 333-20399

Nevada	30-0796392
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2455 Cawthra Rd, Unit 75 Mississauga, Ontario Canada, L5A3P1
(Address of principal executive offices, including Zip Code)
416-862-5257 (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Exchange Act: None

Securities Registered Pursuant to Section 12(g) of the Exchange Act:

Common Stock, $0.001 per share par value

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No☒.

Indicate by check mark if registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒ .

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months or such shorter period that the registrant was required to submit and post such files. Yes ☐ No ☒

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K. ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) : Yes ☐ No ☒

The aggregate market value of the voting stock of the Registrant held by non-affiliates April 9, 2020 was approximately $________.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Outstanding as of April 9, 2020
Common stock, $0.0001 par value	73,101,349

ZOOMPASS HOLDINGS, INC.

TABLE OF CONTENTS


PART I

Item 1.	Business	4
Item 1A.	Risk Factors	5
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	10

PART II

Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	13
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk`	26
Item 8.	Financial Statements and Supplementary Data	27
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	27
Item 9A.	Controls and Procedures	28
Item 9B.	Other Information	29

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	30
Item 11.	Executive Compensation	33
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	35
Item 13.	Certain Relationships and Related Transactions, and Director Independence	36
Item 14.	Principal Accounting Fees and Services	36

PART IV

Item 15.	Exhibits, Financial Statement Schedules	27

SIGNATURES		43

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements contained in this annual report include "forward-looking statements" within the meaning of such term in Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause actual financial or operating results, performances or achievements expressed or implied by such forward-looking statements not to occur or be realized. Forward-looking statements made in this annual report generally are based on our best estimates of future results, performances or achievements, predicated upon current conditions and the most recent results of the companies involved and their respective industries. Forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "could", "should", "project", "expect", "believe", "estimate", "anticipate", "intend", "continue", "potential", "opportunity" or similar terms, variations of those terms or the negative of those terms or other variations of those terms or comparable words or expressions. Potential risks and uncertainties include, among other things, such factors as:

	•	concentration of our customer base and fulfillment of existing customer contracts;
	•	our ability to maintain pricing;
	•	deterioration of the credit markets;
	•	competition within our industry;
	•	asset impairment and other charges;
	•	our identifying, making and integrating acquisitions;
	•	loss of key executives;
	•	the ability to employ skilled and qualified workers;
	•	inadequacy of insurance coverage for certain losses or liabilities;
	•	federal legislation and state legislative and regulatory initiatives relating to our industry;
	•	future legislative and regulatory developments;
	•	our beliefs regarding the future of our competitors;
	•	our expectation that the demand for our products services will eventually increase; and
	•	our expectation that we will be able to raise capital when we need it.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" set forth in this Annual Report on Form 10-K for the year ended December 31, 2019, any of which may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks may cause the Zoompass Holdings, Inc. or its industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.

As used in this Annual Report on Form 10-K and unless otherwise indicated, the terms "we," "us," "our," or the "Company" refer to Zoompass Holdings, Inc. and our subsidiaries. Unless otherwise specified, all dollar amounts are expressed in United States dollars.

PART I

ITEM 1. BUSINESS

Overview of Our Business

Recent Developments

UVIC, Inc., was incorporated in Nevada on August 21, 2013.

On May 8, 2015, UVIC, Inc., filed a registration statement with the Securities and Exchange Commission Form S-1 to register 7,000,000 shares of our common stock at a per share price of $0.01 on behalf of selling shareholders. The SEC file number of the registration statement is 333-203997. The Form S-1 was declared effective by the SEC on August 7, 2015.

Prior to the transaction described below, UVIC., Inc., had limited operating and development activities.

Effective August 22, 2016, the Company entered into an Agreement for the Exchange of Stock (the "Agreement") with Zoompass, Inc., an Ontario, Canada corporation ("Zoompass") that was incorporated under the laws of Ontario on June 8, 2016. Pursuant to the Agreement, the Company agreed to issue 8,050,784 shares of its restricted common stock to Zoompass' shareholders ("Zoompass' shareholders") in exchange for all the shares of Zoompass Inc. owned by the Zoompass Inc.'s Shareholders. At the Closing Date, Rob Lee, a significant shareholder of the Company agreed to cancel 7,000,000 shares of the Company's common stock, which shares constituted the control shares of the Company. Other than this one significant shareholder, shareholders of the Company held 2,670,000 shares. As a result of the Agreement, Zoompass is now a wholly owned subsidiary of the Company. The Company has amended its Articles of Incorporation to change its name to Zoompass Holdings, Inc. and the appropriate forms were filed with FINRA and the SEC to change its name, address and symbol and complete a 3.5-1 forward split, which was consented to by the majority of shareholders on September 7, 2016 and approved in February 2017, for shareholders of record on September 7, 2016.

All share figures have been retroactively stated to reflect the stock split approved by shareholders, unless otherwise indicated. Additionally, the Company's shareholders consented to an increase of the shares authorized to 500,000,000 and a revision of the par value to $0.0001.

As the former Zoompass shareholders ended up owning the majority of the Company, the transaction does not constitute a business combination and was deemed to be a recapitalization of the Company with Zoompass being the accounting acquirer, accordingly the accounting and disclosure information is that of Zoompass going forward.

Effective March 6, 2018 (the "Closing Date"), Zoompass Holdings, Inc.'s (the "Company") Canadian operating subsidiary, Zoompass, Inc., entered into an Asset Purchase Agreement (the "Agreement") for the sale of its Prepaid Card Business ("Prepaid Business") to Fintech Holdings North America Inc., or its designee. The aggregate purchase price of the Prepaid Business was C$400,000. The transaction was completed on March 26, 2018.

During the first quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.

On October 17, 2018, the Company reached an Asset Purchase Agreement and purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.

Zoompass Inc., was incorporated under the laws of Ontario on June 8, 2016. On October 17, 2018, pursuant to an asset purchase agreement with Virtublock, certain net assets were acquired by the Company in exchange for shares of the Company. The net assets primarily consisted of certain technology IP related to cryptocurrency exchange/wallet, certain strategic partnerships and customer contracts. On March 25, 2019, the name of the company was changed from Zoompass Inc. to Virtublock Canada Inc. (“VCI”).

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.

The Company has incurred recurring losses from operations and as of December 31, 2019 had a net working capital deficiency and an accumulated deficit. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the consolidated financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary should the Company be unable to continue in existence.

In January 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,030,300 non-registered shares of the Company's common stock was issued for gross proceeds of $151,515.

In March 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 300,000 non-registered shares of the Company's common stock will be issued for gross proceeds of $15,000.

There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing in the future to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Issuance of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.

Beginning in March 2020, the Governments of Canada and the United States, as well as other foreign governments instituted emergency measures as a result of the COVID-19 virus outbreak. The virus has had a major impact on North America and international securities, currency markets and consumer activity which may impact the Company's financial position, its results of future operations and its future cash flows significantly. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of future operations, financial position, and liquidity in fiscal year 2020.

The Company is actively seeking opportunities to enter into partnership or acquire third parties with existing revenue streams. The company is well positioned to achieve this objective and will continue to pursue such opportunities going forward.

The Company will remain a Fintech company and continue to develop and acquire software platforms and services to sell to customers globally with a focus on leading edge technologies and software as a service.

ITEM 1A. RISK FACTORS

Global Economic Conditions

The unprecedented events in global financial markets in the past several years have had a profound impact on the global economy. Many industries have been impacted by these market conditions. Market events and conditions, including volatility in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede the Company's access to capital or increase the cost of capital and may adversely affect the Company's operations. The Company is also exposed to liquidity risks in meeting its operating and capital expenditure requirements in instances where the Company's cash position is unable to be maintained or appropriate financing is unavailable. These factors may impact the Company's ability to obtain capital on terms favourable to it or at all. Increased market volatility may impact the Company's operations which could adversely affect the trading price of the Common Shares.

Operating and Capital Requirements

The Company competes for financing and personnel with other financial technology companies. There can be no assurance that additional capital or other types of financing will be available, when needed, or that, if available, the terms of such financing will be favourable to the Company. The Company may need to make significant expenditures in connection with the development of its platform or other lines of business. There is no assurance that any such funds will be available for operations and the ability of the Company to raise such capital will depend, in part, upon conditions in the capital markets at the time and its historical business performance. If additional capital is raised by the issuance of shares from the treasury of the Company, shareholders may suffer dilution. Future borrowings by the Company or its subsidiaries may increase the level of financial and interest rate risk to the Company as the Company will be required to service future indebtedness. Further, failure to obtain additional financing on a timely basis could cause the Company to reduce, suspend, or terminate its proposed operations.

Dependence on Highly Skilled Personnel

The Company's prospects depend in part on the services of key executives and other highly skilled and experienced personnel focused on managing the Company's interests, in addition to the identification of new opportunities for growth and funding. The loss of these persons or the Company's inability to attract and retain additional highly skilled employees required for the Company's activities may have a material adverse effect on its business or future operations. The Company does not currently maintain "key person" life insurance on any of its key employees.

Negative Operating Cash Flow

The Company has negative operating cash flow and may continue to have negative operating cash flow in future periods. To the extent that the Company has negative operating cash flow, the Company will need to continue to deploy a portion of its cash reserves to fund such negative operating cash flow.

Limited operating history of the Company's new direction; No assurance of profitability; anticipated losses.

The Company has a limited operating history and, accordingly, has a limited operating history on which to base an evaluation of our business. Our business must be considered in light of the risks, expenses and problems frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving markets which involve technology. The in-development operations are subject to all of the risks inherent in the establishment of a new business enterprise. Accordingly, the likelihood of our success must be considered in the light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the starting and expansion of a business and the relatively competitive environment in which we will operate. Unanticipated delays, expenses and other problems such as setbacks in launch and development, product sourcing manufacturing, and market acceptance are frequently encountered in establishing a new business such as the Company`s. There can be no assurance that the Company will be successful in addressing such risks, and any failure to do so could have a material adverse effect on the Company's business, results of operations and financial condition.

Because of the Company`s limited operating history, the Company has limited historical financial data on which to base planned operating expenses. Accordingly, our expense levels, which are, to a large extent, variable, will be based in part on our expectations of future revenues. As a result of the variable nature of many of our expenses, we may be unable to adjust spending in a timely manner to compensate for any unexpected delays in the development and

marketing of our products or any subsequent revenue shortfall. Any such delays or shortfalls will have an immediate adverse impact on our business, operating results and financial condition.

The Company has not achieved profitability to date. To the extent that net revenue does not grow at anticipated rates or that increases in its operating expenses precede or are not subsequently followed by commensurate increases in net revenue, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition will be materially and adversely affected. There can be no assurance that the Company's operating losses will not increase in the future or that the Company will ever achieve or sustain profitability.

Regulatory Risk

Although the Company follows certain laws and regulations and receives the requisite approvals to operate in the lines of business it currently or intends to operate in there is no guarantee that these laws, regulations and approvals will not be challenged or impugned. Further changing regulatory regimes may subject the Company to new laws and regulations. Changes in the regulatory environment the Company operates in can have a material adverse effect on operations.

Demand for our products and services may not develop as expected our projected revenues and profits will be affected.

Future profits are influenced by many factors, including economics, and will be predicated on a stable and/or growing market and the purchase and consumption of our products and services. The Company believes, and our growth expectations assume, that the markets for our suite of products and services will continue to grow, that the Company will increase its penetration of these markets and that our anticipated revenue from selling into this market will continue to increase. If the Company's expectations as to the size of these markets and its ability to sell our products and services in this market are not correct, our revenue may not materialize, and our business will be harmed.

Operating results may fluctuate and may fall below expectations in any fiscal quarter.

Our operating results are difficult to predict and are expected to fluctuate from quarter to quarter due to a variety of factors, many of which are outside of our control. As a result, comparing our operating results on a period-to-period basis may not be meaningful, and you should not rely on our past results or future predictions prepared by the Company as an indication of our future performance. If our revenue or operating results fall in any period, the value of our common stock would likely decline.

Factors that may cause our operating results to fluctuate include:

	●	our ability to arrange potential financing or generate operating cash flows;
	●	our ability to acquire products to resell to our customers;
	●	changes in federal, state and local government;
	●	availability and costs of labor and equipment;
	●	the addition of new customers or the loss of existing customers;
	●	our ability to control costs, including operating expenses;
	●	changes in the mix of our products and services;
	●	the length of our sales cycle;
	●	the productivity and growth of our sales force;
	●	the timing of opening of new offices or making other significant investments in the growth of our business, as the revenue we hope to generate from those expenses often lags several quarters behind those expenses:
	●	changes in pricing by us or our competitors;
	●	costs related to the acquisition and integration of companies or assets;
	●	general economic trends, including changes in geopolitical events such as war or incidents of terrorism; and
	●	future accounting pronouncements and changes in accounting policies.

The Company operates in a highly competitive industry and competitors may compete more effectively.

Many of our competitors have longer operating histories and greater resources than us, and could focus their substantial financial resources to develop a competing business model, develop products or services that are more attractive to potential customers than what we offer or convince our potential customers that they should require financing arrangements that would be impractical for smaller companies to offer. Our competitors may also offer

products and services at prices below cost and/or devote significant sales forces to competing with us or attempt to recruit our key personnel by increasing compensation, any of which could improve their competitive positions. Any of these competitive factors could make it more difficult for us to attract and retain customers; cause us to lower our prices in order to compete, and reduce our market share and revenue, any of which could have a material adverse effect on our financial condition and operating results. We can provide no assurance that we will continue to effectively compete against our current competitors or additional companies that may enter our markets.

International operations could expose business to additional risks

The Company expects to generate a portion of sales outside of Canada in the future. Operating internationally is one of our growth strategies, and we expect our revenue and operations outside of North America will expand in the future. These operations will be subject to a variety of risks that we do not face currently:

	•	establishing and managing highly experienced foreign suppliers, distributors and relationships and overseeing and ensuring the performance of foreign subcontractors;
	•	increased travel, infrastructure and legal and compliance costs associated with multiple international locations;
	•	additional withholding taxes or other taxes on our foreign income, and tariffs or other restrictions on foreign trade or investment;
	•	imposition of, or unexpected adverse changes in, foreign laws or regulatory requirements, many of which differ from those which the Company currently operates in;
	•	increased exposure to foreign currency exchange rate risk;
	•	longer payment cycles for sales in some foreign countries and potential difficulties in enforcing contracts and collecting accounts receivable;
	•	difficulties in repatriating overseas earnings;
	•	general economic conditions in the countries in which we operate; and
	•	political unrest, war, incidents of terrorism or responses to such events.

Our overall success in international markets will depend, in part, on our ability to succeed in differing legal, regulatory, economic, social and political conditions. We may not be successful in developing and implementing policies and strategies that will be effective in managing these risks in each country where we do business. Our failure to manage these risks successfully could harm our international operations, reduce our international sales and increase our costs, thus adversely affecting our business, financial condition and operating results.

The Company relies on outside consultants, service providers and suppliers

We will rely on the experience of consultants, service providers and suppliers. In the event that one or more of these consultants or terminates its relationship with the Company, or becomes unavailable, suitable replacements will need to be obtained and there is no assurance that such consultants, service providers and suppliers could be obtained under conditions favorable to us.

We rely on strategic relationships to promote our products

The Company relies on strategic partnerships with outside companies and individuals to promote and supply certain of our products and services, thus making the future success of our business particularly contingent on the efforts of other parties. An important part of our strategy is to promote acceptance of our products through with certain service providers who we feel could assist us with our promotion strategies. Our dependence raises potential risks with respect to the future success of our business. Our success is dependent on the successful completion and commercial deployment of our products and services and on the future commitment of our distributors to our products and technology.

Reliance on our suppliers

The Company relies vendors and suppliers to provide power, as well as high quality products and services on a consistent basis. The future success of the Company is contingent on the efforts and performance of these suppliers. The Company may have difficulty in locating or using alternative resources should supply problems arise with the current suppliers. An interruption or reduction in the source of supply of or an unanticipated increase in vendor prices, could materially affect our operating results and damage customer relationships as well as our business.

Future growth could strain resources, and if the Company is unable to manage growth, it may not be able to successfully implement our business plan.

The Company hopes to experience rapid growth in operations, which will place a significant strain on our management, administrative, operational and financial infrastructure. Our future success will depend in part upon the ability of our executive officers to manage growth effectively. This will require that we hire and train additional personnel to manage our expanding operations. In addition, we must continue to improve our operational, financial and management controls and our reporting systems and procedures. If we fail to successfully manage our growth, we may be unable to execute upon our business plan.

Failure to protect intellectual property, our planned business could be adversely affected.

Despite efforts to protect and ensure the Company has proprietary rights, parties may attempt to copy aspects of our products, obtain, claim and use information that we regard as proprietary. Unauthorized use of our proprietary technology could harm our business. Litigation to protect our intellectual property rights can be costly and time-consuming to prosecute, and there can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action.

Unforeseen Liabilities from Past Acquisitions

There may be liabilities and claims that the Company has failed to discover or has underestimated in connection with previous acquisitions. In addition, there may be expenditure requirements that the Company has failed to discover or underestimated in connection with these acquisitions, which amounts may be material. Any such liabilities or expenditure requirements could have a material adverse effect on the Company's business, financial condition or future prospects.

Conflicts of Interest

Certain of the directors and officers of the Corporation also serve as directors and/or officers of other companies there exists the possibility for such directors and officers to be in a position of conflict. Any decision made by any of such directors and officers will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its shareholders. In addition, each director is required to declare and refrain from voting on any matter in which such director may have a conflict of interest.

If we issue additional shares in the future, it will result in the dilution of our existing stockholders.

Our articles of incorporation authorize the issuance of up to 500,000,000 shares of our common stock, with a par value of $0.0001 per share. Our board of directors may choose to issue some or all of such shares to acquire one or more companies or products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current stockholders. Further, such issuance may result in a change of control of our company.

Trading of our stock is restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority ("FINRA") has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our stock.

The price of our common stock may be negatively impacted by factors that are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTC Markets and a market is established and trading has begun, trading through the OTCQB is frequently thin and highly volatile. There is no assurance that a sufficient market will continue in our stock, in which case it could be difficult for stockholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends, and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price. This may never happen, and investors may lose all of their investment in our company.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We maintain our head office at 2455 Cawthra Rd, Unit 75, Mississauga, ON L5A3P1, Canada.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business.

During the year ended December 31, 2017, the Company learned that a class action complaint (the “Class Action Complaint”) had been filed against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the District of New Jersey. The Class Action Complaint alleges, inter alia, that defendants violated the federal securities laws by, among other things, failing to disclose that the Company was engaged in an unlawful scheme to promote its stock. The Company has been served with the Class Action Complaint. The Company has analyzed the Class Action Complaint and, based on that analysis, has concluded that it is legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.

Also during the year ended December 31, 2017, the Company learned that two derivative complaints (the “Derivative Complaints”) on behalf of the Company have been filed against the Company’s Directors and Chief Executive Officer, President, Corporate Secretary, and Chief Financial Officer, and nominally against the Company, in Nevada state and federal court. The state court action subsequently was removed to federal court. The Derivative Complaints allege, inter alia, that the Company’s officers and directors directed the Company to undertake an unlawful scheme to promote its stock. The Company has been served with the Derivative Complaints. The Company has analyzed them and, based on its analysis, has concluded that the Derivative Complaints are legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.

On August 7, 2018, the United States District Court for the District of New Jersey dismissed the Class Action Complaint. Additionally, subsequent to the year end on August 21, 2018, the Company was served with the Second Amended Complaint in the District of New Jersey. The Company filed a motion to dismiss the Second Amended Complaint on September 18, 2018. On January 23, 2019, the United States District Court for the District of New Jersey dismissed the Second Amended Complaint with prejudice. Plaintiff filed a motion for reconsideration of the dismissal order on February 7, 2019. On May 14, 2019, the Plaintiff’s motion to reconsider was denied. On June 27, 2019, the plaintiffs filed an appeal with United States Court of Appeals for the Third Circuit. On March 12, 2020, the United States Court of Appeal for the Third Circuit dismissed the Third appeal.

The Company was also served with a third derivative action, which was filed March 23, 2018, against the Company’s Directors and Chief Executive Officer, President, and Corporate Secretary, and nominally against the Company, in Nevada state court. Subsequently, this case was removed to federal court.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for Our Common Stock

Since November 2016, our common stock has been quoted on the OTCQB, which is part of the OTC Market Group's quotation system. We were initially traded under the symbol "UVVC" but beginning in January 2017, our stock began trading under the symbol "ZPAS".

The following table sets forth, for the periods indicated, the high and low closing prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

	Closing Prices ⁽¹⁾
	High		Low
FISCAL YEAR ENDED DECEMBER 31, 2019:
Fourth Quarter	$	0.13		0.05	4
Third Quarter		0.15		0.05	8
Second Quarter		0.13		0.05
First Quarter		0.205		0.10

FISCAL YEAR ENDED DECEMBER 31, 2018:
Fourth Quarter	$	0.12		0.07
Third Quarter		0.09		0.07
Second Quarter		0.16		0.08
First Quarter		0.23		0.14

(1)

The above tables set forth the range of high and low closing prices per share of our common stock as per the OTC Markets.

(2)

The Company shares are currently halted.

Approximate Number of Holders of Our Common Stock

As of April 9, 2020, the Company had 104 active stockholders of record and 73,101,349 shares of common stock were issued and outstanding. Because some of our common stock is held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Our registrar and transfer agent for our common stock is VStock Transfer. Their address is 18 Lafayette Place, Woodmere, NY 11598 and their telephone number and facsimile are +1 (646) 536-3179 and +1 (212) 828-8436, respectively.

Dividend Policy

The Company has not declared any dividends since incorporation and does not anticipate doing so in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

Our board of directors has discretion on whether to pay dividends unless the distribution would render us unable to repay our debts as they become due. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

See Item 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, "Securities Authorized for Issuance Under Equity Compensation Plans".

Recent Sales of Unregistered Securities

Recent Sales of Unregistered Securities

During January 2018, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 200,000 non-registered shares of the Company's common stock was issued for proceeds of $40,671.

During April 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 687,500 non-registered shares of the Company's common stock was issued for proceeds of $39,672.

On April 11, 2018, the company issued 1,500,000 shares of the common stock to a corporation controlled by an officer of the company as compensation for services rendered, and on April 14, 2018, the company issued 1,000,000 shares of the common stock to a current officer of the company who at that time was an arm’s length consultant, as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

On September 10, 2018, the Company issued 8,370,000 shares of the common stock to various arm’s length third parties upon settlement of promissory notes.

On October 17, 2018, the Company issued 44,911,724 shares of the common stock in respect of the assets purchase from Virtublock Global Corp.

During the months of November and December 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 5,450,000 non-registered shares of the Company's common stock was issued for proceeds of $399,483.

On January 20, 2019, the company issued 1,000,000 shares of the common stock to a consultant as compensation for services rendered, and on April 20, 2019, the company issued 500,000 shares of the common stock to a consultant as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

In May 2019, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 1,038,461 non-registered shares of the Company's common stock was issued for proceeds of C$135,000.

In July 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 500,000 non-registered shares of the Company's common stock was issued for proceeds of C$55,000.

In August 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 500,000 non-registered shares of the Company's common stock was issued for proceeds of $50,000.

In December 2019, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 757,575 non-registered shares of the Company's common stock was issued for proceeds of $39,041.

In January 2020, the Company issued 757,575 non-registered shares of the Company's common stock. The net proceeds in amount of $34,091 was received in December 31, 2019.

In January 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

In March 2020, the company issued 1,160,000 shares of the common stock to as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

Purchases of Our Equity Securities

No repurchases of our common stock were made during our fiscal year ended December 31, 2019.

ITEM 6. Selected financial data

Smaller reporting companies are not required to provide the information required by this item.

ITEM 7. Management's Discussion and Analysis of financial Condition and Results of Operations

The following management's discussion and analysis should be read in conjunction with our consolidated financial statements and the notes thereto and the other financial information appearing elsewhere in this annual report. In addition to historical information, the following discussion contains certain forward-looking information. See "Special Note Regarding Forward-Looking Statements" above for certain information concerning those forward looking statements. Our financial statements are prepared in U.S. dollars and in accordance with U.S. GAAP. References in this Report to a particular "fiscal" year are to our fiscal year ended on December 31.

Nature of Operations

Zoompass Holdings, Inc. formerly known as UVIC. Inc. ("Zoompass Holdings" or the "Company") was incorporated under the laws of the State of Nevada on August 21, 2013. Effective August 22, 2016, the Company entered into an Agreement for the Exchange of Stock (the "Agreement") with Zoompass, Inc., an Ontario, Canada corporation ("Zoompass"). Pursuant to the Agreement, the Company agreed to issue 8,050,784 shares of its restricted common stock to Zoompass' shareholders ("Zoompass' shareholders") in exchange for all the shares of Zoompass Inc. owned by the Zoompass Inc.'s Shareholders. At the Closing Date, Rob Lee, a significant shareholder of the Company agreed to cancel 7,000,000 shares of the Company's common stock, which shares constituted the control shares of the Company. Other than this one significant shareholder, shareholders of the Company held 2,670,000 shares. As a result of the Agreement, Zoompass is now a wholly owned subsidiary of the Company. The Company has amended its Articles of Incorporation to change its name to Zoompass Holdings, Inc. and the appropriate forms were filed with FINRA and the SEC to change its name, address and symbol and complete a 3.5-1 forward split, which was consented to by the majority of shareholders on September 7, 2016 and approved in February 2017, for shareholders of record on September 7, 2016.

During the first fiscal quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first fiscal quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.

There is no certainty that the Company will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable it to meet its obligations as they come due and consequently continue as a going concern. The Company will require additional financing in the future to fund its operations and it is currently working on securing this funding through corporate collaborations, public or private equity offerings or debt financings. Sales of additional equity securities by the Company would result in the dilution of the interests of existing shareholders. There can be no assurance that financing will be available when required.

The Company expects the forgoing, or a combination thereof, to meet the Company's anticipated cash requirements for the next 12 months; however, these conditions raise substantial doubt about the Company's ability to continue as a going concern.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business as they come due. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated statement of balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

For the year ended December 31, 2019, the Company incurred a net loss of $615,256 (2018 - $ 6,236,176).

The Company may incur additional operating losses for the 2020 fiscal year.

Results of operations for the year ended December 31, 2019 and for the period ended December 31, 2018

Revenue and cost of sales

During the year ended December 31, 2019, the Company has not generated revenue and incurred no cost of sales.

During the year ended December 31, 2018, the Company discontinued its prepaid card business via disposal and its mobility solution business via abandonment. For the year ended December 31, 2018, the Company had gross prepaid card revenue of $97,861 and mobility products revenue of $323,074 and $40,350 from mobility product commissions. Net of commissions and agent fees the Company recognized net revenue of $434,947. The cost of sales was $469,947 for year ended December 31, 2018.

Up to March 31, 2018, The Company's revenue consisted of various fees associated with the legacy prepaid debit card program that was acquired as part of the acquisition of the payment platform. Additionally, the Company recognized revenue from the sale of mobility products.

General and administrative and other expenses

For the year ended December 31, 2019, the Company incurred $266,433 (Continued operations - $266,433; Discontinued operations - $NIL) in salaries and consultant costs. For the year ended December 31, 2018, the Company incurred $354,684 (Continued operations - $354,684; Discontinued operations - $NIL) in salaries and consultant costs. The decrease was due to the reduction of the Company’s headcount during the year 2019 as a result of the discontinuation of its prepaid card business and mobility solution business.

Share-based payment expense was $227,000 for the year ended December 31, 2019, compared with $863,324 for the year ended December 31, 2018. The decrease was due to decreased level of activity in 2019 and issuance of stock options and shares as compensation when compared with December 2018.

Depreciation and amortization expenses were $NIL for the year ended December 31, 2019 compared with $NIL for the year ended December 31, 2018, as a result of the sale of its prepaid card business.

For the year ended December 31, 2019 the Company incurred $168,429 in professional fees compared with $215,420 due to a reduction in legal costs during 2019.

Filing fees and regulatory costs were $4,892 for the year ended December 31, 2019 compared with $18,769 year ended December 31, 2018.

Net bank fees for the year ended December 31, 2019 were $1,323 compared with $14,291 for the year ended December 31, 2018 as a result of reduced operations during 2019 compared with the year 2018.

For the year ended December 31, 2019, the Company incurred a net loss of $Nil from discontinued operations compared with a net loss of $430,271 for 2018. For the year ended December 31, 2019, the Company incurred a net loss of $615,256 from continuing operations compared with a net loss of $5,805,905 for 2018.

For year ended December 31, 2018, the impairment provision related to intangible assets and goodwill was $3,458,203 which was included in continuing operations. For year ended December 31, 2019, the recovery of doubtful account was 163,872 compared to allowance of $192,305 for 2018. In 2018, included in the net loss from discontinued operation, the loss on disposal of assets was $13,682.

The loss per share from continuing operations is 0.006 and 0.100 for year ended December 31, 2019 and 2018 respectively. The loss per share from discontinued operations is 0.000 and 0.007 for year ended December 31, 2019 and 2018 respectively.

Liquidity and Capital Resources

As at December 31, 2019, the Company had $21,477 in cash and cash equivalents compared with $36,075 as at December 31, 2018.

Operations for the year ended December 31, 2019 were primarily financed through the issuance of shares in the common stock of the Company and advances from related party corporations. Operations for the year ended December 2018 were primarily financed through the issuance of shares in the common stock of the Company, and the issuance of promissory notes.

There is no certainty that we will be successful in generating sufficient cash flow from operations or achieving and maintaining profitable operations in the future to enable us to meet our obligations as they come due and consequently continue as a going concern. The Company may require additional funds to further develop our expanded business plan. The Company may require additional financing this year to fund our operations and is examining possible sources of funding beyond the existing cash generated from operations. Sales of additional equity securities would result in the dilution of the interests of existing stockholders. There can be no assurance that financing will be available when required. In the event that the necessary additional financing is not obtained, the Company would reduce its discretionary overhead costs substantially, or otherwise curtail operations.

Net Cash Used in Operating Activities

During the years ended December 31, 2019 and 2018, $538,609 and $1,276,582 in cash, respectively, was used for operations.

Net Cash Provided by Investing Activities

During the year ended December 31, 2019, the Company generated $nil from investing activities compared with cash provided in investing activities of $152,871 for year ended December 31, 2018.

Net Cash Provided by Financing Activities

For the year ended December 31, 2019 the Company raised $264,337 from the issuances of shares of its common stock and received advances in amount of $286,188 from related party corporations.

For the year ended December 31, 2018, $479,826 was raised from issuance of shares of its common stock and $477,402 through the issuance of a promissory note. Additionally, the $837,000 was raised of promissory notes.

Commitments

There were no commitments as of December 31, 2019. At December 31, 2018, the Company sub-leased office space under a contract which ran to October 31, 2019.

Financial instruments and risk factors

The Company has exposure to liquidity risk and foreign currency risk. The Company's risk management objective is to preserve and redeploy the existing treasury as appropriate, ultimately to protect shareholder value. Risk management strategies, as discussed below, are designed and implemented to ensure the Company's risks and the related exposure are consistent with the business objectives and risk tolerance.

Liquidity Risk: Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages its liquidity by ensuring that there is sufficient capital to meet short and long-term business requirements, after taking into account cash requirements from operations and the Company's holdings of cash and cash equivalents. The Company also strives to maintain sufficient financial liquidity at all times in order to participate in investment opportunities as they arise, as well as to withstand sudden adverse changes in economic circumstances.

Management forecasts cash flows for its current and subsequent fiscal years to predict future financing requirements. Future requirements may be met through a combination of credit and access to capital markets. The Company's cash requirements are dependent on the level of operating activity, a large portion of which is discretionary. Should management decide to increase its operating activity, more funds than what is currently in place would be required. It is not possible to predict whether financing efforts will be successful or sufficient in the future. At December 31, 2019, the Company had $21,477 in cash and cash equivalents (December 31, 2018 - $36,075).

The following are the maturities, excluding interest payments, reflecting undiscounted future cash disbursements of the Company's financial liabilities based on the period year ended December 31, 2019.

	2020		2021 and later

Accounts payable and accrued liabilities	$	710,430	$	—
Due to related party corporations		100,201
	$	810,631	$	—

Currency risk: The Company's expenditures are incurred in Canadian and US dollars. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.

Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2019, the Company's credit risk is primarily attributable to cash and cash equivalents, and accounts receivable. At December 31, 2019, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2019, the Company had an allowance for doubtful accounts of $NIL (December 31, 2018 - $192,305) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.

Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk as the promissory note have been settled during the year.

Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

Related Party Transactions

During 2016, the Company paid an advance on behalf of certain shareholders in the amount of $250,000. These shareholders also serve as directors and officers of the Company. $120,000 was returned by December 31, 2016, and $50,000 was returned during the year ended December 31, 2017. The amount reflected in prepaids and other current assets as at December 31, 2019 was $Nil after a 100% provision (December 31, 2018 - $$Nil).

During 2018, the Company made advance to two corporations related to the former Chief Executive Officer in the amount of $201,711 in the normal course of operations. After the impairment assessment, the company made a 100% provision for the advanced amounts. During the year 2019, $163,872 of the amount written off in 2019 were recovered.

The balances of due to related party corporations at December 31, 2019 represent advances from related party corporations which is non-interest bearing, non-secured and due on demand.

The total amount owing to the former directors and officers of the Company and corporations controlled by the former directors and officers, in relation to the services they provided to the Company in their capacity as Officers and service provider at December 31, 2019 was $319,969 (December 31, 2018 - $337,762) which includes expense reimbursements. This amount is reflected in accounts payable and is further described below.

As at December 31, 2019, the Company had an amount owing to an entity owned and controlled by the former Chief Executive Officer of the Company of $265,533 (December 31, 2018 - $265,533). The amount owing relates to services provided by the then Chief Executive Officer and expense reimbursements.

As at December 31, 2019, the Company had an amount owing to an entity owned and controlled by the former Chief Executive Officer of the Company of $nil (December 31, 2018 - $14,861). The amount owing relates to services provided by the then Chief Executive Officers and expense reimbursements.

As at December 31, 2019, the Company had an amount owing to an entity owned and controlled by the former Secretary of the Company of $54,436 (December 31, 2018 - $54,436). The amount owing relates to services provided by the then Secretary and expense reimbursements.

As at December 31, 2019, the Company had an amount owing to the former Chief Financial Officer of the Company of Nil (December 31, 2018 - $2,932). The amount owing relates to services provided by the then Chief Financial Officer.

No amount was recorded in 2019 for share based payments to directors and officers of the company. A total of $863,324 (Issuance of shares for service – 337,250, stock options expenses - $313,504, deferred stock options expenses - $212,570) was recognized during 2018 for share-based payments expense to directors and officers of the Company.

As at December 31, 2019 and December 31, 2018, the amounts owing to officers of the Company are recorded in accounts payable and accrued liabilities.

Subsequent events

In January 2020, the Company issued 757,575 non-registered shares of the Company's common stock. The net proceeds in amount of $34,091 was received in December 31, 2019.

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. (note 3). Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

Critical Accounting Policies

Basis of presentation

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission, in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary to present a fair statement of the results for the period.

Basis of consolidation

The consolidated financial statements comprise the accounts of Zoompass Holdings, the legal parent company, and its wholly-owned subsidiaries, Virtublock Canada Inc. and Paymobile Inc. (“Paymobile”), a company incorporated in Florida, USA, after the elimination of all intercompany balances and transactions.

Subsidiaries are all entities (including special purpose entities) over which the Company, either directly or indirectly, has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. Where the group does not directly hold more than one half of the voting rights, significant judgment is used to determine whether control exists. These significant judgments include assessing whether the group can control the operating policies through the group's ability to appoint the majority of directors to the board. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group until the date on which control ceases.

The accounts of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Inter-company transactions, balances and unrealised gains or losses on transactions between the entities are eliminated.

Translation of foreign currencies

The reporting and functional currency of the Company and Paymobile is the US dollar. The Company has determined that the functional currency of VCI is the Canadian dollar. (references to which are denoted "C$").

Transactions in currencies other than the functional currency are recorded at the rates of the exchange prevailing on dates of transactions. At each balance sheet reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at each reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the historical date of the transaction. The impact from the translation of foreign currency denominated items are reflected in the statement of operations and comprehensive loss.

Translation of Zoompass' assets and liabilities is done using the exchange rates at each balance sheet date; revenue and expenses are translated at average rates prevailing during the reporting period or at the date of the transaction; shareholders' equity is translated at historical rates. Adjustments resulting from translating the consolidated financial statements into the US Dollar are recorded as a separate component of accumulated other comprehensive income in the statement of changes in stockholders’ deficiency.

Revenue recognition

Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties.

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are in included in cost of revenues.

Prepaid cards: The Company’s revenues are primarily generated from financial service fees charged to cardholders and merchants accepting the cards for payment. Revenue for prepaid financial services is generated from multiple sources including transaction fees, cardholder fees, load fees and interchange fees. These fees are recognized on the transaction date. Funds received from customers are held in trust and the corresponding amount of funds available for use are recorded as a liability. Fees charged for card program, website and card design are recognized when services are performed or when the product is transferred to the customer. Other revenue represents gains realized on de-recognition of clients' funds payable. The prepaid card business operation discontinued at end of March 2018.

Mobility solution: The Company recognizes revenue in products revenue when a customer takes possession of the device. This usually occurs when the customer signs a contract. For mobile devices, customers usually pay within company specified credit term which is within 12 months. The mobility solution business operation discontinued at end of March 2018.

Cryptocurrency platform: The company offers organizations the cryptocurrencies exchange & wallets platforms as a service in order to facilitate the exchange of different cryptocurrencies to its end users. The revenue is mainly generated from the software customization services fees charged to the organizations and transaction fees charged to the end users when using the exchange platform. The Company, for the years ended December 31, 2019 and 2018, has not generated revenue from the Cryptocurrency platform.

The Company accounts for individual products and services separately if they are distinct – i.e. if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The consideration (including any discounts) is allocated between separate products and services in a bundle based on their stand-alone selling prices. The stand-alone selling prices are determined based on the prices at which the Company separately provides prepaid cards related financial services and sells the mobile devices.

Financial instruments

ASC Topic 820 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Included in the ASC Topic 820 framework is a three level valuation inputs hierarchy with Level 1 being inputs and transactions that can be effectively fully observed by market participants spanning to Level 3 where estimates are unobservable by market participants outside of the Company and must be estimated using assumptions developed by the Company. The Company discloses the lowest level input significant to each category of asset or liability valued within the scope of ASC Topic 820 and the valuation method as exchange, income or use. The Company uses inputs which are as observable as possible and the methods most applicable to the specific situation of each company or valued item.

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, cash in trust and customer deposits, accounts receivables and due from related party corporations, net of any allowances for doubtful accounts, accounts payable and accrued liabilities, promissory note, due to related party corporations, and client funds approximate fair value because of the short period of time between the origination of such instruments and their expected realization. The allowance for doubtful accounts is reflected in "Office and Sundry" expenses on the statement of operations and comprehensive loss. Per ASC Topic 820 framework these are considered Level 2 inputs where inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

The Company's policy is to recognize transfers into and out of Level 3 as of the date of the event or change in the circumstances that caused the transfer. There were no such transfers during the year.

Basic and diluted loss per share

Basic and diluted loss per share has been determined by dividing the net loss available to shareholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. The diluted weighted average number of shares outstanding is calculated as if all dilutive options had been exercised or vested at the later of the beginning of the reporting period or date of grant, using the treasury stock method.

Loss per common share is computed by dividing the net loss by the weighted average number of shares of common shares outstanding during the period. Common share equivalents, options and warrants are excluded from the computation of diluted loss per share when their effect as anti-dilutive.

Segment reporting

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", establishes standards for the way that public business enterprises report information about operating segments in the Company's consolidated financial statements. Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Significantly all of the assets of the Company are located in, all revenues are currently earned in Canada and the Company’s research, development and strategical planning operations are carried out and served as an integral part of the Company’s business. The Company’s reportable segments and operating segments include prepaid card operations, mobility solution operations, cryptocurrency platform operations and research, development and strategical planning operations.

Cash and cash equivalents

Cash and cash equivalents include demand deposits held with banks and highly liquid investments with original maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. Cash in trust and customer deposits are amounts held by the Company at various financial institutions for settlement of clients' funds payable. Client funds are amounts owing on behalf of clients for prepaid debit cards.

Equipment

Equipment is stated at historic cost. The Company has the following sub-categories of property and equipment with useful lives and depreciation methods as follows:

•

Computer equipment and furniture – 30% declining balance per year

The cost of assets sold, retired, or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts. Expenditures for maintenance and repairs are charged to expense as incurred.

The Company follows the ASC Topic 360, which requires that long-lived assets be reviewed annually for impairment whenever events or changes in circumstances indicate that the assets' carrying amounts may not be recoverable.

In performing the review for recoverability, if future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets are less than their carrying values, an impairment loss represented by the difference between its fair value and carrying value, is recognized. When properties are classified as held for sale they are recorded at the lower of the carrying amount or the expected sales price less costs to sell.

Goodwill

Goodwill represents the excess purchase price over the estimated fair value of net assets acquired by the Company in business combinations. Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the acquisition amount over such fair value being recorded as goodwill and allocated to reporting units ("RU"). RUs are the smallest identifiable group of assets, liabilities and associated goodwill that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Given how the Company is structured and managed, the Company has one RU. Goodwill arises principally because of the following factors among other things: (1) the going concern value of the Company's capacity to sustain and grow revenues through securing additional contracts and customers,; (2) the undeserved market of consumers looking for financial transactional alternatives; (3) technological and mobile capabilities beyond acquired lines of business to capture buyer specific synergies arising upon a transaction and (4) the requirement to record a deferred tax liability for the difference between the assigned values and the tax bases of the assets acquired and liabilities assumed in a business combination, if any.

Intangibles

The Company has applied the provisions of ASC topic 350 – Intangibles – goodwill and other, in accounting for its intangible assets. Intangible assets subject to amortization are amortized on a straight-line method on the basis over the useful life of the respective intangibles. The following useful lives are used in the calculation of amortization:

Trademark – 7.25 years

Acquired payment platform – 5 years

Intellectual property/Technology – 7.25 years

Impairment goodwill and indefinite-lived intangible assets and intangible assets with definite lives

The Company accounts for goodwill and intangible assets in accordance with ASC No. 350, Intangibles-Goodwill and Other ("ASC 350"). ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units; assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

The Company assesses the carrying value of goodwill, indefinite-lived intangible assets and intangible assets with definite lives, such as Trademark, Technology platform, customer base and other intangible assets for potential impairment annually as of December 31, or more frequently if events or changes in circumstances indicate such assets might be impaired.

When assessing goodwill for impairment the Company elects to first perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. If we do not perform a qualitative assessment, or if the qualitative assessment indicates it is more likely than not that the fair value of the reporting units, is less than its carrying amount, the Company performs a quantitative test. The Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company estimates fair value using the income approach, to estimate the future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets.

Income taxes

Deferred tax is recognized using the asset and liability method, on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. However, the deferred tax is not recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred taxes determined using tax rates (and laws) that have been enacted by the reporting date and are expected to apply when the related deferred taxation asset is realized, or the deferred taxation liability is settled. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Share-based payment expense

The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards. Share-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of shares are valued using the fair value of the shares at the time of grant; issuances of warrants and other share-based awards are valued using the Black-Scholes model with assumptions based on historical experience and future expectations. All issuances of share-based payments have been fully-vested, otherwise the Company recognizes such awards over the vesting period based on expectations of the number of awards expected to vest over that period on a straight-line basis.

Business combinations

A business combination is a transaction or other event in which control over one or more businesses is obtained. A business is an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits. A business consists of inputs and processes applied to those inputs that have the ability to create outputs that provide a return to the Company and its shareholders. A business need not include all of the inputs and processes that were used by the acquiree to produce outputs if the business can be integrated with the inputs and processes of the Company to continue to produce outputs. The Company considers several factors to determine whether the set of activities and assets is a business.

Business acquisitions are accounted for using the acquisition method whereby acquired assets and liabilities are recorded at fair value as of the date of acquisition with the excess of the purchase consideration over such fair value being recorded as goodwill and allocated to reporting units (“RUs”). If the fair value of the net assets acquired exceeds the purchase consideration, the difference is recognized immediately as a gain in the consolidated statement of operations. Acquisition related costs are expensed during the period in which they are incurred, except for the cost of debt or equity instruments issued in relation to the acquisition which is included in the carrying amount of the related instrument. Certain fair values may be estimated at the acquisition date pending confirmation or completion of the valuation process. Where provisional values are used in accounting for a business combination, they are adjusted retrospectively in subsequent periods. However, the measurement period will not exceed one year from the acquisition date. If the assets acquired are not a business, the transaction is accounted for as an asset acquisition.

Assets and disposal groups held for sale and discontinued operations

Assets and disposal groups (assets and liabilities relating to an activity that is to be sold or abandoned) are classified as ‘held for sale’ if their carrying amount is to be recovered principally through a sales transaction rather than through continuing use. The reclassification takes place when the assets are available for immediate sale and the sale is highly probable. These conditions are usually met as from the date on which agreement to sell is ready for signing or an abandonment plan starts to implement. Assets held for sale and disposal groups are measured at the lower of carrying amount and fair value less costs to sell. Assets held for sale are not depreciated or amortized.

Discontinued operations comprise those activities that were disposed of either via sales or abandonment during the period or which were classified as held for sale at the end of the period, and represent a separate major line of business or geographical area that can be clearly distinguished for operational and financial reporting purposes.

Leases

The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor.

As our current operating lease of office space, at the commencement, has a term of less than 12 months, we elect not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

Use of estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

The areas where management has made significant judgments include, but are not limited to:

Accounting for acquisitions: The accounting for acquisitions requires judgement to determine if an acquisition meets the definition of a business combination under ASC 805. Further, management is required to use judgement to determine the fair value of the consideration provided and the net assets and liabilities acquired.

Assessment of Impairment: The Company has certain assets for which a determination of an impairment, if any, requires significant judgement to determine if the carrying amount of any assets are impaired. Management uses judgement in determining among other things, whether or not an indicator of impairment has occurred, future cash flows, time horizons, and likelihood of recoverability. The assets where management has assessed the recoverability the carrying amount includes accounts receivable, equipment, intangibles and goodwill.

Deferred taxes: The Company recognizes the deferred tax benefit related to deferred income tax assets to the extent recovery is probable. Assessing the recoverability of deferred income tax assets requires management to make significant estimates of future taxable profit and the income tax rate at which the future tax assets will be realized. To the extent that future cash flows, taxable profit and income tax rates differ significantly from estimates, the ability of the Company to realize deferred tax assets could be impacted. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions in future periods from deferred income tax assets.

Share-based payment expense: The calculation of share-based payment expense requires management to use significant judgment in determining the fair value of share-based payment expense. Additionally, the management is required to make certain assumptions in arriving at the fair value of share-based payment expense.

Derivative financial instruments: The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company reviews the terms of equity instruments and other financing arrangements, if any, to determine whether there are embedded derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Also, in connection with the issuance of financing instruments, the Company may issue freestanding options or warrants to employees and non-employees in connection with consulting or other services. These options or warrants may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.

Derivative financial instruments are initially measured at their fair value. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported as charges or credits to income. To the extent that the initial fair values of the freestanding and/or bifurcated derivative instrument liabilities exceed the total proceeds received an immediate charge to income is recognized in order to initially record the derivative instrument liabilities at their fair value.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period. If reclassification is required, the fair value of the derivative instrument, as of the determination date, is reclassified. Any previous charges or credits to income for changes in the fair value of the derivative instrument are not reversed. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.

NEWLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.

In June 2018, the FASB issued an accounting pronouncement (FASB ASU 2018-07) to expand the scope of ASC Topic 718, Compensation - Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. The pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company adopted this pronouncement and such adoption did not have a material impact on our financial position and/or results of operations.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2014-09 (“ASU”), Revenue from Contracts with Customers (Topic 606) to clarify existing guidance on revenue recognition. This guidance includes the required steps to achieve the core principle that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The Company adopted this pronouncement on a modified retrospective and such adoption did not have a material impact on our financial position and/or results of operations.

On January 1, 2018, the Company adopted the accounting pronouncement issued by the FASB to clarify how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. This guidance requires entities to show changes in the total of cash, cash equivalents and restricted cash in the combined statement of cash flows. This guidance was adopted on a retrospective basis, and such adoption did not have a material impact on combined financial position and/or results of operations.

On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. As our current operating lease of office space, at the commencement, has a term of less than 12 months, we elect not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk

The follow discussion about our market risk disclosures involves forward-looking statements. Actual results could differ from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments for speculative or trading purposes.

Financial instruments and risk factors

	2020		2021 and later

Accounts payable and accrued liabilities	$	710,430	$	—
Due to related party corporations		100,201
	$	810,631	$	—

Currency risk: The Company's expenditures are incurred in Canadian and US dollars. The results of the Company's operations are subject to currency translation risk. The Company mitigates foreign exchange risk through forecasting its foreign currency denominated expenditures and maintaining an appropriate balance of cash in each currency to meet the expenditures. As the Company's reporting currency is the US dollar, fluctuations in US dollar will affect the results of the Company.

Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2019, the Company's credit risk is primarily attributable to cash and cash equivalents, and accounts receivable. At December 31, 2019, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2019, the Company had an allowance for doubtful accounts of $NIL (December 31, 2018 - $192,305) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.

Interest rate risk: Interest rate risk is the risk borne by an interest-bearing asset or liability as a result of fluctuations in interest rates. Financial assets and financial liabilities with variable interest rates expose the Company to cash flow interest rate risk. The Company's does not have significant interest rate risk as the promissory note have been settled during the year.

Fair values: The carrying amounts reported in the consolidated balance sheet for cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

ITEM 8 Financial Statements and Supplementary Data

Consolidated Financial Statements

The financial statements required by this item begin on page F-1 hereof.

ITEM 9 Changes in and Disagreements with Accountants and Accounting and Financial Disclosure

On November 10, 2016, our board of directors approved the engagement of MNP, LLP ("MNP"), as the Company's new independent registered public accounting firm.

On June 19, 2019, our board of directors approved the engagement of SRCO Professional Corporation ("SRCO"), as the Company's new independent registered public accounting firm.

During the fiscal years ended December 31, 2014 and 2015, and the subsequent interim period prior to the engagement of MNP, the Company has not consulted MNP regarding (i) the application of accounting principles to any specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the Company's financial statements, and either a written report was provided to the registrant or oral advice was provided that the new accountant concluded was an important factor considered by the registrant in reaching a decision as to the accounting, auditing or financial reporting issue; or (iii) any matter that was either the subject of a disagreement (as defined in Item 304(o)(1)(iv)) or a reportable event (as defined in Item 304(a)(1)(v)).

ITEM 9A Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports it files or submitted under the Securities Exchange Act of 1934, as amended (Exchange Act), is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports it files or submitted under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Because of inherent limitations, disclosure controls and procedures, as well as internal control over financial reporting, may not prevent or detect all inaccurate statements or omissions.

Our management, with the supervision and participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2019, were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to our management to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Inherent Limitations Over Internal Controls

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles ("GAAP"). Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on the Company's assessment, management has concluded that its internal control over financial reporting was ineffective as of December 31, 2019, to provide e reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018, and determined that our controls and procedures were ineffective at the reasonable assurance level. This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permits us to provide only management's report in this annual report.

We have assessed the effectiveness of our internal control over financial reporting as of December 31, 2019, the period covered by this Annual Report on Form 10-K, as discussed above. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based upon this evaluation, our chief executive officer and chief financial officer concluded that our internal control over financial reporting as of the end of December 31, 2019, were ineffective due to the following: lack of segregation of duties, due to limited administrative and financial personnel and related resources and as only one of our directors is independent.

Changes In Internal Control Over Financial Reporting

During the year ended December 31, 2019, there were no changes in our internal controls over financial reporting that materially affected, or is reasonably likely to have a materially affect, on our internal control over financial reporting.

Item 9B. Other Information

None.

Where You Can Find More Information

We file annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Our Commission filings are available to the public over the Internet at the Commission's website at http://www.sec.gov. The public may also read and copy any document we file with the Commission at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. We maintain a website at http://www. yappn.com (which website is expressly not incorporated by reference into this filing). Information contained on our website is not part of this report on Form 10-K.

PART III

ITEM 10 Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The following table sets forth the names, ages and positions held with respect to each Director and Executive Officer of the Company as of the date of this Annual Report.

Name	Age	Position	Appointed/Elected

Emanuel (Manny) Bettencourt		Director and Chief Executive Officer	March 1, 2020
Steven Roberts		Director	November 2019
Mahendra Naik		Director	March 1, 2020

The former officers and directors for the period ended December 31, 2019 were as follows:

Name	Age	Position	Appointed/ Elected	Served till

Roger Charles Connors		Director	December 2018	October 2019
Mahmoud Hashem		Director and Chief Executive Officer	September 2018	November 2019
Manish Grigo		Director and Chief Financial Officer	July 2019	November 2019

Each Director serves until the next annual stockholders meeting and until their respective successors are duly elected and qualified or earlier resignation or removal.

Mr. Bettnecourt has been the Chairman & CEO of Sensor Technologies Inc. since December 2019. He has also been the Executive Chairman of W2E technology Corp. since January 2018, and Managing Director of First Principles Group Inc. since May 2002. From January 2018 until November 2018, Mr. Bettencourt was CEO and CO-Founder of Demand Power Group Inc. Mr. Bettencourt is a graduate of the University of Toronto at Mississauga (B.COMM 1995) and holds both a CPA, CA designation.

Mr. Roberts has been the CEO of Epic NRG LLC from 2018 to present. He served as President for Zoompass Inc. from September 2016 through September 2018. From December 2013 through 2016, Mr. Roberts was the Vice President of Mobility for Ingram Micro. Mr. Roberts earned his Bachelors of Arts Degree in 1991 from the University of Guelph, in Guelph, Ontario.

Mr. Hashem Founded . in July 2018 and has served as the Chief Executive Officer since inception. Mr. Hashem also founded ZeroWire Group in January 2009 and has served Managing Director since inception. Mr. Hashem graduated from Ain Shams University in July 1996 with a Bachelor of Engineering - Electronics & Communication Department, Cairo, Egypt.

Mr. Naik has been Director of IAMGOLD Corporation, a TSX and NYSE listed company from 1990 to present. Since 2006, Mr. Naik has been Chairman and Director of Fortune Minerals Limited, a TSX listed company. From 2003 to date, Mr. Naik has been a Director of Goldmoney Inc, a TSX listed financial services company specializing in precious metals. From 2012 to 2017, Mr. Naik was a Director of FirstGlobal Data Limited. Mr. Naik earned his Bachelor of Commerce Degree in 1981 from University of Toronto and holds a CPA, CA designation.

Mr. Alli was a founder of First Global Data Corp. in November 2012, and has served as the Chief Financial Officer since inception. Mr. Alli resigned as CEO effective December 12, 2018 and resigned as a Director effective July 19, 2019.

Mr. Lee also appointed (i) Mr. Alli the Chief Executive Officer of the Company, effective as of September 17, 2018, and (ii) Mr. Hashem the Chief Operating Officer, effective as of September 13, 2018, and Manish Grigo the Chief Financial Officer, effective as of September 13, 2018.

Mr. Grigo has spent over ten years as a Technology Analyst with various boutique investment banking firms in Toronto; where he covered a wide range of technology sectors ranging from Gaming, FinTech and Telcos. Since 2017 he has been working as an independent consultant and advising companies on their capital markets strategies. Mr. Hashem on behalf of the board appointed Mr. Grigo as a Director effective July 25, 2019.

Mr. Connors has been the President and Director of Southern Sky Resources Corp. in Toronto, Canada since 2011. Mr. Connors earned a Bachelor of Business Administration from Acadia University in Wolfville, Canada in 1992. Mr. Connors resigned as Director effective October 15, 2019.

Family Relationships

There are no family relationships between any directors or officers of the Company.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

1. had any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; except for (i) Mr Bettencourt served as CFO of Distinct Infrastructure Group Inc. between Aug 2015 and December 2017; subsequent to his departure the company was placed into receivership in March 2019 ;

2. been convicted in a criminal proceeding or is a named subject to a pending criminal (excluding traffic violations and other minor offenses);

3. been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; or

4. been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission statements of ownership and changes in ownership. The same persons are required to furnish us with copies of all Section 16(a) forms they file. We believe that, during fiscal 2017, all of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities complied with the applicable filing requirements.

In making these statements, we have relied upon examination of the copies of all Section 16(a) forms provided to us and the written representations of our executive officers, directors and beneficial owner of more than 10% of a registered class of our equity securities.

Code of Business Conduct and Ethics

A Code of Business Conduct and Ethics is a written standard designed to deter wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements, (c) compliance with applicable laws, rules and regulations, (d) prompt reporting of violations of the code to an appropriate person and (e) accountability for adherence to the Code. We are not currently subject to any law, rule or regulation requiring that we adopt a Code of Business Conduct and Ethics. However, the Company is in the process of preparing a code of business conduct and ethics policy during 2017.

Committees of Board of Directors

There are currently no committees of the Board of Directors. Our board of directors is of the view that it is appropriate for us not to have a standing nominating, audit or compensation committee because the current size of our board of directors does not facilitate the establishment of a separate committee. Our board of directors has performed, and will perform adequately, the functions of any specific committee.

Board Oversight of Risk

Our Board of Directors recognizes that, although risk management is a primary responsibility of the Company's management, the Board plays a critical role in oversight of risk. The Board, in order to more specifically carry out this responsibility, has assigned certain task focusing on reviewing different areas including strategic, operational, financial and reporting, compensation, compliance, corporate governance and other risks to the relevant Board Committees as summarized above. Each Committee then reports to the full Board ensuring the Board's full involvement in carrying out its responsibility for risk management.

ITEM 11. EXECUTIVE COMPENSATION

Persons Covered

As of December 31, 2019, there was one Named Executive Officers are set forth below:

Name		Position
Steven Roberts		Director and Chief Executive Officer

Compensation Discussion and Analysis

Overview

The Company's executive compensation program is generally designed to align the interests of executives with the interests of shareholders and to reward executives for achieving the Company's objectives. The executive compensation program is also designed to attract and retain the services of qualified executives.

The Board of Directors shall determine all compensation packages.

Executive compensation generally consists of base salary or fees, bonuses and long-term incentive equity compensation such as stock grants or additional options to purchase shares of the Company's common stock as well as various health and welfare benefits. The Board has determined that both the base salary or fees and long-term incentive equity compensation should be the principal component of executive compensation. The Board has not adopted a formal bonus plan, and all bonuses are discretionary.

Elements of Compensation

The executive compensation for the Named Executive Officers) for the period ended December 31, 2019, primarily consisted of base salary or fees, long term incentive equity compensation, and other compensation and benefit programs generally available to other employees,

Base Salary. The Board establishes base salaries or fees for the Company's Named Executive Officers based on the scope of their responsibilities, taking into account competitive market compensation paid by other companies in the Company's peer group for similar positions. Generally, the Board believes that executive base salaries or fees should be in-line with similar responsibilities at comparable companies in line with our compensation philosophy.

Base salaries are reviewed annually, and may be adjusted to realign salaries with market levels after taking into account individual responsibilities, performance and experience.

Bonuses. Bonuses are intended to compensate the Named Executive Officers for achieving the Company's financial performance and other objectives established by the Board each year. The Board currently does not adopt a formal bonus plan and all bonuses are discretionary.

Long-Term Incentive Equity Compensation. The Board believes that stock-based awards promote the long-term growth and profitability of the Company by providing executive officers with incentives to improve shareholder value and contribute to the success of the Company and by enabling the Company to attract, retain and reward the best available persons for executive officer positions. The Named Executive Officers were eligible to receive certain number of shares of common stock of the Company. The Company cannot currently determine the number or type of additional awards that may be granted to eligible participants under the long-term incentive equity compensation plan in the future. Such determination will be made from time to time by the Board.

Change-In-Control and Termination Arrangements. The Company is in the process of formalizing Change-In-Control and Termination Arrangements that would be consistent with all officers of the Company.

Summary Compensation Table

The following table sets forth information concerning all compensation awarded to, earned by or paid during fiscal years 2018 and 2019, to the Named Executive Officers:

Name	Principal position	Year	Salary or fees	Bonus	Deferred stock Units/ shares⁽⁷⁾	Option awards	Total

Rob Lee⁽¹⁾	Chief Executive Officer	2019	Nil	Nil	Nil	Nil	Nil
		2018	$137,502	Nil	$103,795	-	$241,297

Mahmoud Hashem⁽²⁾	Chief Executive Officer	2019	$19,158	Nil	Nil	Nil	$19,158
		2018	$140,489	Nil	Nil	$58,056	$198,745

Nayeem Saleem Alli⁽³⁾	Chief Executive Officer	2019	21,101	Nil	Nil	Nil	21,101
		2018	$16,980	Nil	Nil	$58,056	$75,036

Steve Roberts⁽⁴⁾	Chief Executive Officer	2019	$2,412	Nil	Nil	Nil	$2,412
		2018	$271,610	Nil	$103,795	Nil	$375,405

Brian Morales⁽⁵⁾	Chief Financial Officer	2019	Nil	Nil	Nil	Nil	Nil
		2018	$21,935	Nil	Nil	Nil	$21,935

Manish Grigo⁽⁶⁾	Chief Financial Officer	2019	$2,668	Nil	Nil	Nil	$2,668
		2018	$8,196	Nil	Nil	$29,028	$37,224

(1)	Effective August 22, 2016, the assumed an agreement that covers fees paid to a company owned and controlled by Rob Lee. The agreement calls for payment of Cdn$22,000 per month plus the reimbursement of expenses incurred on the Company's behalf. As at December 31, 2019, the fees noted above remain unpaid.
(2)	Mahmoud Hashem joined the Company as COO in September 2018 and in December 2018 was appointed as CEO. Under his consulting agreement Mr. Hashem was compensated Cdn$15,000 per month plus certain travel related expenses as required by his duties as President. Mr. Hashem resigned from the Company in November 2019.
(3)	Nayeem Alli became CEO in September 2018 and resigned effective December 12, 2018. Mr. Alli resigned from the Company in December 2018.
(4)	Steve Roberts joined the Company as President in September 2016. Under his employment agreement Mr. Roberts was compensated Cdn$10,000 per month plus certain travel related expenses as required by his duties as President. Effective January 2017, this was increased to Cdn$15,000 per month. In September 2018 Mr. Roberts resigned from the Company. In November 2019, Mr. Roberts was appointed became CEO of the company.
(5) (6)	Brian Morales joined as Chief Financial Officer in August 2016. For 2016, fees were paid to a company owned and controlled by Brian Morales for the time incurred. Effective January 2017, Mr. Morales earned a salary of Cdn $12,000 per month. Manish Grigo joined as Chief Financial Officer in September 2018. For 2018, fees were paid to a company owned and controlled by Manish Grigo for the time incurred. Effective January 2019, Mr. Grigo earned a salary of Cdn $7,000 per month. Mr. Grigo resigned from the Company in November 2019.
(7)	As required by SEC rules, amounts in the column "Stock Awards" present the aggregate grant date fair value of awards made each year computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification™ 718 Compensation—Stock Compensation ("FASB ASC 718"). The grant date fair value of each of the executives' award is measured based on the closing price of our common stock on the date of grant. These amounts do not reflect whether the recipient has actually realized or will realize a financial benefit from the awards. Under generally accepted accounting principles, compensation expense with respect to stock awards granted to our employees, executives and directors is generally recognized over the requisite services period. The SEC's disclosure rules previously required that we present stock award information based on the amount recognized during the corresponding year for financial statement reporting purposes with respect to these awards. However, the recent changes in the SEC's disclosure rules require that we now present stock award amounts using the grant date fair value of the awards granted during the corresponding year.

Outstanding Equity Awards as of December 31, 2019

Outstanding stock options granted to Named Executive Officers ("NEO's") and Directors as at December 31, 2019 are as follows:

Name

Type of

instrument

No. of securities underlying unexercised instrument available

No. of securities underlying unexercised instrument exercisable

Exercise

price⁽¹⁾

Expiration

date

Steven Roberts

N/A

_____________

(1) In US dollars

(2) No fees were paid to directors during the year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plans

In December 2018, the Company's Board of Directors approved and the majority of shareholders consented to the adoption of an equity-based compensation plan. The total instruments convertible into common stock of the Company cannot exceed 20,000,000 options to purchase shares at any one point in time. The maximum awards to any one grantee is subject to certain restrictions.

In April 2018, the Company issued 2,500,000 shares in lieu of consulting fees to directors, officers, employees and consultants of the Company.

On December 14, 2018, the Company issued 5,400,000 stock options to directors, officers, employees and consultants of the Company and have a life of five years from date of grant. All of them vest immediately and must be exercised by the recipient.

During year ended December 31, 2019 the Company cancelled the 5,400,000 stock options issued on December 14, 2018.

Security Ownership of Certain Beneficial Owners and Management

The following tables set forth information as of April 9, 2020, regarding the beneficial ownership of our common stock (a) by each stockholder who is known by the Company to own beneficially in excess of 5% of our outstanding common stock; (b) by each of the Company's officers and directors; (c) and by the Company's officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of common stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of stock. Unless otherwise identified, the address of the directors and officers of the Company listed above is 2455 Cawthra Rd, Unit 75 Mississauga, Ontario Canada, L5A3P1.

Title of Class

Name of Beneficial Owner

Office, if any

Amount of

controlled

Percent

class

Common Stock

2425287 Ontario Inc.

4,335,612

5.93%

Common Stock

Rob Lee

11,773,368

16.10%

⁽¹⁾ Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities

Changes in Control

There are no arrangements known to us, including any pledge by any person of our securities, the operation of which may at a subsequent date result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

Other than as noted in Section 11 and mentioned in other items in the form, there are no related party transactions.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

Our executive officers and directors from time to time may serve on the board of directors executive officers of other companies. However, none of our executive officer or directors serve as executive officers or directors or on the compensation committee of another company that has any executive officer serving on our Board of Directors (or Board of Directors acting as the Compensation Committee).

No person who served on our Board of Directors (or Board of Directors acting as the Compensation Committee) had any relationship requiring disclosure under Item 404 of Regulation S-K.

Director Independence

Only Mr. Roger Connors was deemed to be an "independent director", as that term is defined by the listing standards of the national exchanges and SEC rules during the period ended December 31, 2019.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

SRCO Professional Corporation is our Principal Independent Registered Public Accountants engaged to audit our financial statements for the period ended December 31, 2019. The following table shows the fees that we paid or accrued for the audit for the year ended December 31, 2019 and December 31, 2018.

Fee Category	December 31, 2019		December 31, 2018
Audit Fees and quarterly review	C	$60,000	C	$84,750
Audit-Related Fees	$	--	$	--
Tax Fees	$	--	$	--
All Other Fees	$	--	$	--

Audit Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for the audit of our annual financial statements, review of financial statements included in our quarterly reports and services that are normally provided by the independent registered public accounting firms in connection with statutory and regulatory filings or engagements for those fiscal years.

Audit-Related Fees

This category consists of fees for assurance and related services by our principal independent registered public accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under "Audit Fees". The services for the fees disclosed under this category include consultations concerning financial accounting and reporting standards.

Tax Fees

This category consists of fees for professional services rendered by our principal independent registered public accountant for tax compliance, tax advice, and tax planning.

All Other Fees

This category consists of fees for services provided by our principal independent registered public accountant other than the services described above.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are filed as part of this Form 10-K:

Exhibit No.		Description

31.1		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on April 9, 2020.

		ZOOMPASS HOLDINGS, INC.
April 9, 2020		By: /s/ Emanuel (Manny) Bettencourt
		Emanuel (Manny) Bettencourt Chief Executive Officer Chief Financial Officer

FINANCIAL STATEMENTS

CONTENTS

Report of Independent Registered Public Accounting Firm			F-1

Consolidated Balance Sheets			F-2

Consolidated Statements of Operations and Comprehensive Loss			F-3

Consolidated Statements of Stockholders' Deficiency			F-4

Consolidated Statements of Cash Flows			F-5

Notes to the Consolidated Financial Statements			F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Zoompass Holdings, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Zoompass Holdings, Inc. (the “Company”) as of December 31, 2019 and 2018, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficiency, and cash flows for each of the years in the two year-period ended December 31, 2019, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two year-period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases as of January 1, 2019 due to the adoption of ASC 842 - Leases.

Material Uncertainty Related to Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring losses from operations and has a net working capital deficiency and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2018

Richmond Hill, Ontario, Canada

April 9, 2020

/s/ SRCO Professional Corporation

CHARTERED PROFESSIONAL ACCOUNTANTS

Authorized to practice public accounting by the

Chartered Professional Accountants of Ontario

F-1

ZOOMPASS HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Expressed in US dollars)

			December 31,			December 31,
	Note		2019			2018
				$			$
ASSETS
Current assets
Cash and cash equivalents		8	$	21,477		$	36,075
Cash held in trust and customer deposits		4		-			-
Accounts receivable (net of allowance for doubtful accounts of NIL, December 31, 2018 - $192,305)		4		-			-
Prepaid expenses and other current assets		11		10,563			7,388
Assets from discontinued operations		4					-
Total current assets				32,040			43,463
Equipment		5		-			-
Intangible assets		6		-			-
Goodwill		6		-			-
Total assets			$	32,040		$	43,463

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities		11	$	710,430		$	637,470
Promissory note		7		-			-
Deferred revenue				38,570			36,650
Due to related party corporations		11		100,201			-
Client funds		4		-			-
Liabilities from discontinued operations		4		-			-
Total liabilities			$	849,201		$	674,120

Stockholders' deficiency
Common stock, $0.0001 par value 500,000,000 shares authorized, 109,746,036 shares issued and outstanding (December 31, 2018 - 105,450,000)		1,9	$	10,975		$	10,545
Shares to be issued		9		34,091			-
Additional paid in capital		9,10		27,104,864			26,648,048
Accumulated deficit				(28,153,965	)		(27,538,709	)
Accumulated other comprehensive income				186,874			249,459
Total stockholders' deficiency				(817,161	)		(630,657	)
Total liabilities and stockholders' deficiency			$	32,040		$	43,463

Going concern		1
Commitments and contingencies		13
Subsequent events		14

See accompanying notes to the consolidated financial statements

Signed on behalf of the Board

/s/ “Emanuel Bettencourt” /s/ “Steven Roberts”

F-2

ZOOMPASS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in US dollars)

	Note		For the year ended December 31, 2019			For the year ended December 31, 2018
				$			$
Revenue		4	$	-		$	-

Expenses
Impairment of intangible assets and goodwill		3, 6		-			(3,458,203	)
Salaries and consultants				(266,433	)		(354,684	)
Rent and occupancy costs				(15,740	)		(56,033	)
Share-based payment expense		9, 10,11		(227,000	)		(863,324	)
Professional fees				(168,429	)		(215,420	)
Telecommunications				(667	)		(2,819	)
Office and sundry expenses and reversal of impairment		11		111,434			(521,403	)
Filing fees and regulatory costs				(4,892	)		(18,769	)
Foreign exchange gain (loss)				38,916			(150,018	)
Net Bank fees				(1,323	)		(14,291	)
Software development expenses				(81,122	)		(150,941	)
				(615,256	)		(5,805,905	)
Loss before income taxes				(615,256	)		(5,805,905	)
Income taxes expenses				-			-
Net loss from continuing operations				(615,256	)		(5,805,905	)
Net loss from discontinued operations, net of tax		4		-			(430,271	)
Net loss				(615,256	)		(6,236,176	)

Other comprehensive income
Foreign exchange translation gain (loss)				(62,585	)		276,851
Net loss and comprehensive loss				(677,841	)		(5,959,325	)

Loss per share - basic and diluted
Loss from continuing operations per share				(0.006	)		(0.100	)
Loss from discontinued operations per share				-			(0.007	)
Weighted average number of common shares outstanding - basic and diluted				107,848,952			58,231,258

See accompanying notes to the consolidated financial statements

F-3

ZOOMPASS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY

(Expressed in US dollars)

		Common stock			Shares to be issued
	Note	Number of Shares		Amount	Number of Shares	Amount		Additional paid in capital		Deficit			Accumulated other comprehensive income (loss)			Total
				$		$		$		$			$			$
December 31, 2017		43,330,776	$	4,332	-	-		21,015,908		(21,302,533	)		(27,392	)		(309,685	)

Issuance of shares for private placement	9	6,337,500		634	-	-		479,192		-			-			479,826
Share-based payment expense - Issuance of shares for services	9,10	2,500,000		250	-	-		337,000		-			-			337,250
Issuance of shares on acquisition of assets	3,9	44,911,724		4,492	-	-		3,453,711		-			-			3,458,203
Share-based3 payment expense - Stock options	10	-		-	-	-		526,074		-			-			526,074
Issuance of shares upon conversion of debts	7,9	8,370,000		837	-	-		836,163		-			-			837,000
Net loss		-		-	-	-				(6,236,176	)		-			(6,236,176	)
Foreign currency translation		-		-	-	-		-		-			276,851			276,851
December 31, 2018		105,450,000	$	10,545	-	-	$	26,648,048	$	(27,538,709	)	$	249,459		$	(630,657	)
																	3
Issuance of shares for private placement	9	2,796,036		280	757,575	34,091		229,966		-			-			264,337
Share-based payment expense - Issuance of shares for services	9,10	1,500,000		150	-	-		226,850		-			-			227,000
Net loss		-		-	-	-		-		(615,256	)		-			(615,256	)
Foreign currency translation		-		-	-	-		-		-			(62,585	)		(62,585	)
December 31, 2019		109,746,036		10,975	757,575	34,091		27,104,864		(28,153,965	)		186,874			(817,161	)

See accompanying notes to the consolidated financial statements

F-4

ZOOMPASS HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in US dollars)

	Note	For the year ended December 31, 2019	For the year ended December 31, 2018
		$	$
Cash flow from operating activities
Net loss		$(615,256)	$(6,236,176)
Net loss from discontinued operations	4	-	430,271
Non-cash items:
Impairment of intangible assets and goodwill	3, 6	-	3,458,203
Share-based payment expense - Issuance of shares for services	9, 10, 11	227,000	337,250
Share-based payment expense - stock options and warrants	10, 11	-	526,074
Foreign exchange (gain) loss		(38,916)	150,018
Reversal of impairment		(163,872)	-
Changes in non-cash operating assets and liabilities
Prepaids and other current assets		(2,722)	84,181
Accounts payable and accrued liabilities		55,157	(5,187)
Net cash used in operating activities - continuing operations		$(538,609)	$(1,255,366)
Net cash used in operating activities - discontinued operations		-	(21,216)
Net cash used in operating activities		$(538,609)	$(1,276,582)

Cash flow from investing activities
Proceeds from disposal of prepaid card business	4	-	152,871
Additions to intangibles		-	-
Net cash used in investing activities - continuing operations		-	-
Net cash provided by investing activities - discontinued operations		-	152,871
Net cash provided by investing activities		-	152,871

Cash flow from financing activities
Issuance of common stock	9	264,337	479,826
Repayment of promissory note	7	-	(477,402)
Issuance of promissory note	7, 9	-	837,000
Due to related party corporation	11	286,188	-
Exercise of warrants	9	-	-
Net cash provided by financing activities		$550,525	839,424

Effect of exchange rate changes on cash		(26,514)	241,992
Decrease increase in cash and cash equivalents		(14,598)	(42,295)
Cash and cash equivalents, beginning of the year		36,075	78,370
Cash and cash equivalents, end of the year		$21,477	$36,075

Supplementary Cash Flow Information
Interest paid		$-	$9,670
Taxes paid		$-	$-

See accompanying notes to the consolidated financial statements

F-5

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 1 — NATURE OF OPERATIONS AND GOING CONCERN

On October 17, 2018, the Company purchased certain business assets that represents a business from Virtublock Global Corp. (“Virtublock”, “VGC”) in return the Company issued 44,911,724 shares to Virtublock and pursuant to the issuance of shares Virtublock ended up owning 45% of total outstanding common shares of the Company.

F-6

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. (note 3). Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business as they come due. These consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and consolidated balance sheet classifications that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

F-7

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

Basis of consolidation

Translation of foreign currencies

F-8

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Revenue recognition

Revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties.

The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue.

F-9

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Disaggregation of revenue, In the following table, revenue is disaggregated by major product line and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable and operating segments. Also see note 4.

Reportable and operating segments

December 31, 2019

Prepaid Cards

Mobility Solution

Total

Major products/services lines

Gross prepaid card revenue (note 4)

Commissions and agent fees (note 4)

Mobility products revenue (note 4)

Fees and other revenue (note 4)

Mobility product commissions (note 4)

Timing of revenue recognition

Products transferred at a point in time (note 4)


	Reportable and operating segments
	December 31, 2018
	Prepaid Cards			Mobility Solution		Total
Major products/services lines
Gross prepaid card revenue (note 4)		97,861			—		97,861
Commissions and agent fees (note 4)		(26,338	)		—		(26,338	)
Mobility products revenue (note 4)		—			323,074		323,074
Fees and other revenue (note 4)		—			—		—
Mobility product commissions (note 4)		—			40,350		40,350
		71,523			363,424		434,947

Timing of revenue recognition
Products transferred at a point in time (note 4)		71,523			363,424		434,947
		71,523			363,424		434,947

F-10

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Financial instruments

Basic and diluted loss per share

Segment reporting

F-11

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Cash and cash equivalents

Equipment

Equipment is stated at historic cost. The Company has the following sub-categories of property and equipment with useful lives and depreciation methods as follows:

•

Computer equipment and furniture – 30% declining balance per year

Goodwill

F-12

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Intangibles

Trademark – 7.25 years

Acquired payment platform – 5 years

Intellectual property/Technology – 7.25 years

Impairment goodwill and indefinite-lived intangible assets and intangible assets with definite lives

When assessing goodwill for impairment the Company elects to first perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. If the Company do not perform a qualitative assessment, or if the qualitative assessment indicates it is more likely than not that the fair value of the reporting units, is less than its carrying amount, the Company performs a quantitative test. The Company recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. The Company estimates fair value using the income approach, to estimate the future undiscounted cash flows (excluding interest charges) from the use and ultimate disposition of the assets.

F-13

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Income taxes

Share-based payment expense

Business combinations

F-14

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

Assets and disposal groups held for sale and discontinued operations

Leases

As our current operating lease of office space, at the commencement, has a term of less than 12 months, the Company elects not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

Use of estimates

The areas where management has made significant judgments include, but are not limited to:

Going concern assessment: As disclosed in Note 1.

Derivative financial instruments: The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

F-15

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Continued)

NEWLY ADOPTED AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The new rules reduce complexity by removing specific exceptions to general income tax accounting methodology including an exception for interim periods showing operating losses in excess of anticipated operating losses for the year. The new rules will be effective for us in the first quarter of 2021. The Company is currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact this guidance may have on our consolidated financial statements and related disclosures.

On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842, “Leases” (“ASC 842”) to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to previous accounting guidance. The Company adopted ASC 842 utilizing the transition practical expedient added by the Financial Accounting Standards Board (“FASB”), which eliminates the requirement that entities apply the new lease standard to the comparative periods presented in the year of adoption. The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use asset, lease obligation, current, and lease obligation, long-term in the consolidated balance sheet. Right-of-use (“ROU”) asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of income. The Company determines the lease term by agreement with lessor. As our current operating lease of office space, at the commencement, has a term of less than 12 months, the Company elects not to apply the recognition requirements of ASC 842 to the short-term lease, instead lease payments are recognized in statement of operations on a straight-line basis over the lease term.

F-16

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 3 – ACQUISTIONS OF BUSINESS

On October 16, 2018, the Company entered into an agreement with Virtublock Global Corp (VGC), a corporation incorporated in Ontario Canada, to acquire assets and intellectual property of VGC. Based on an examination of the net assets acquired, the acquisition of the net assets was determined to be a business as defined under ASC 805.

Pursuant to the agreement, the Company issued 44,911,724 shares of it’s common stock to VGC as purchase consideration. The fair value of the shares issued was determined to be $3,458,203 based on the market value of the common stock as the date of issuance. The following table sets forth the allocation of the purchase consideration to the fair value of the net assets acquired. The acquired goodwill is primarily related to the value attributed to a company that is expected to experience accelerated growth.

The Company assessed the goodwill and intangible assets assigned as a result of the acquisition for impairment and considered them impaired.

Management tested goodwill and intangibles for impairment and determined them to be impaired. The main cause of the impairment was Company’s inability to secure the required financing and customer contracts in order to operationalize the new acquisition of VirtuBlock Global, Inc. As a result, the carrying amounts of intangibles and goodwill could not be supported.

Impairment of Goodwill and intangible assets:

Management used the Income approach to estimate the value of the Company’s intangible assets based on projections (adjusted for multiple scenarios and weighted probabilities) of future cash flows.

Impairment regarding Goodwill

The fair value of the business unit based on the discounted cash flow analysis and net asset valuations of the reporting unit do not exceed the carrying amount, therefore goodwill was considered impaired.

Impairment regarding Intangibles

The undiscounted (pre-tax) cash flows of the reporting unit using projections do not exceed its’s carrying value, and therefore intangibles were considered impaired.

Consideration
Common shares issued	$	3,458,203
Net assets acquired
Customer base (note 6)	$	-
Trade name – Virtublock (note 6)		6,600
Intellectual property/ Technology (note 6)		11,200
Non-compete agreements (note 6)		-
Goodwill (note 6)		3,440,403
Total net assets acquired	$	3,458,203
Impairment provision for the year (note 6)		(3,458,203)
		-

F-17

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 3 – ACQUISTIONS OF BUSINESS (Continued)

Acquisition of transportation enablement platform

During the year ended December 31, 2017, the Company entered into an agreement to acquire a transportation enablement platform (the "Platform") which provides fully automated dispatching and bookings management built for taxi companies, limousine companies and ride-sharing service providers. The Platform gives customers an app-based experience while the acquired cloud-based Platform, provides service providers a range of functions which include customer booking, accounts management, driver tracking, real-time notifications, auto dispatching algorithms, accounting and settlements, corporate account management as well as providing reporting and analytics. The Platform has also shown to have a direct application in the B2B space in providing corporations with a more efficient taxi chit solution to combat fraud and excessive administration costs.

In exchange for the acquisition of the Platform from a private Canadian based company, the Company will be providing as consideration the equivalent of up to C$1,000,000 in the form of non-registered shares in the common stock of the Company, based on a share price of the lesser of US$3.00 per share, or the share price on closing. The equivalent of C$400,000 in shares is payable on closing with C$300,000 payable in shares on the first anniversary of the closing, subject to the satisfaction of certain milestones, and an additional C$300,000 payable in shares on the second anniversary of the closing, subject to the satisfaction of certain milestones.

Transaction costs incurred with respect to the acquisition of the Platform have been expensed in the statements of operations and comprehensive loss for the year ended December 31, 2017.

During 2018, the planned acquisition transaction was cancelled.

F-18

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 4 – ASSETS AND LIABILITIES FROM DISCONTINUED OPERATIONS

On March 6, 2018, the Company entered into an asset purchase agreement to sell the prepaid card business for total consideration of C$400,000, comprised of C$200,000 upon closing, C$100,000 12 months from the date of closing and the equivalent of C$100,000 in shares. A former Director and Chief Executive Officer was related to an officer of the acquirer of the prepaid card business. The transaction was approved by the Board of Directors. The Company has determined that the prepaid card business represents a component and is a reportable segment of the Company. The transaction completed in March 2018. As of March 31, 2018, the Company received C$200,000 ($152,871).

During the first fiscal quarter of 2018, the Company implemented a plan to abandon the mobility solution operation. The Company has determined that the mobility solution operation represents a component and a reportable segment of the Company. According to the plan of abandonment, the Company gradually ceased accepting any new business during first quarter of 2018 and settled all the remaining orders and obligations from mobility solution by end of March 2018.

The Company determined that the disposal of prepaid card business and abandonment of mobility solution operations represent a strategical shift of the company’s business operations. The prepaid card operation and mobility solution operation were part of the company’s plan of disposal and both met the held-for-sale criteria within a short period of time, therefor, the two operations were accounted for, presented and disclosed as discontinued operations.

A reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations to total assets and liabilities of the disposal group classified as discontinued that are presented separately in the consolidated balance Sheets is as below:

		December 31,		December 31,
		2019		2018

Major classes of assets included in discontinued operations:
Cash held in trust and customer deposits	$	—	$	—
Accounts receivable		—		—
Equipment (note 5)		—		—
Intangible assets (note 6)		—		—
Total assets from discontinued operations	$	—	$	—

Major classes of liabilities included in discontinued operations
Accounts payable and accrued liabilities		—		—
Client funds		—		—
Total liabilities from discontinued operations		—		—

The assets and liabilities were classified as discontinued operation because that have been discontinued in March 2018.A reconciliation of the major classes of line items constituting net loss from discontinued operations to net loss from discontinued operations that are presented in the consolidated statements of operations and comprehensive loss is as below:

F-19

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 4 – ASSETS AND LIABILITIES FROM DISCONTINUED OPERATIONS (Continued)

	For the year ended		For the year ended
	December 31, 2019		December 31, 2018

Major classes of line items constituting net loss from discontinued operations
Revenue
Gross prepaid card revenue (Note 2)	$	-	$	97,861
Commissions and agent fees (Note 2)		-		(26,338	)
Mobility products revenue (Note 2)		-		323,074
Fees and other revenue (Note 2)		-		-
Mobility product commissions (Note 2)		-		40,350
Net revenue		-		434,947
Processing and card fees		-		(118,180	)
Mobility products cost of goods sold		-		(351,767	)
Gross margin		-		(35,000	)

Expenses
Impairment goodwill and trademark		-		-
Salaries and consultants		-		(189,284	)
Depreciation and amortization		-		-
Office and sundry expenses and other		-		(192,305	)
Loss on disposal of assets		-		(13,682	)
		-		(395,271	)
Net loss from discontinued operations that are presented in the consolidated statements of operations and comprehensive loss	$	-	$	(430,271	)

F-20

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 5 – EQUIPMENT

Cost	Computer equipment			Furniture			Total
		$			$			$
Balance at December 31, 2017	$	66,005		$	2,497		$	68,502
Disposal		(64,207	)		(2,429	)		(66,636	)
Foreign exchange		(1798	)		(68	)		(1,866	)
Balance at December 31, 2018		-			-			-
Addition		-			-			-
Disposal		-			-			-
Foreign exchange		-			-			-
Balance at December 31, 2019		-			-			-

Accumulated depreciation		Computer equipment			Furniture			Total
		$			$			$
Balance at December 31, 2017$	$	(26,732	)	$	(699	)	$	(27,431	)
Disposal		26,022			681			26,703
Foreign exchange		710			18			728
Balance at December 31, 2018		-			-			-
Addition		-			-			-
Disposal		-			-			-
Foreign exchange		-			-			-
Balance at December 31, 2019		-			-			-
		-			-			-
Balance at December 31, 2018 (note 4)		-			-			-
Balance at December 31, 2019	$	-		$	-		$	-

F-21

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 6 – INTANGIBLE ASSETS AND GOODWILL

Intangible assets

Cost	Trademark/			Technology			Customer
	Trade name			platform/ IP			base		Total
Balance at December 31, 2017	$	168,620		$	239,649		$	-	$	408,269
Additions		6,600			11,200			-		17,800
Disposal		(164,145	)		(230,626	)		-		(394,771	)
Foreign exchange		(4,475	)		(9,023	)		-		(13,498	)
Balance at December 31, 2018	$	6,600		$	11,200		$	-	$	17,800
Additions		-			-			-		-
Disposal		-			-			-		-
Foreign exchange		-			-			-		-
Balance at December 31, 2019	$	6,600		$	11,200		$	-	$	17,800


Accumulated Amortization		Trademark/			Technology			Customer		Total
Trade name		Trade name			platform/ IP			base

Balance at December 31, 2017	$	(168,620	)	$	(24,677	)	$	-	$	(193,297	)
Amortization										0
Disposal		164,145			23,437			-		187,582
Foreign exchange		4,475			1,240			-		5,715
Balance at December 31, 2018	$	-		$	-		$	-	$	-
Amortization										-
Disposal		-			-			-		-
Foreign exchange		-			-			-		-
Balance at December 31, 2019	$	-		$	-		$	-	$	-

Balance at Dec 31, 2018 before impairment		6,600			11,200					17,800
Impairment in 2018		(6,600	)		(11,200	)				(17,800	)
Balance at December 31, 2018		-			-					-
Balance at December 31, 2019		-			-					-

Goodwill										Total
Balance at January 1, 2018										-
Acquisition (Note 3)										3,440,403
Impairment (Note 3)		-			-					(3,440,403	)
Foreign exchange										-
Balance at December 31, 2018									$	-
Acquisition										-
Foreign exchange										-
Balance at December 31, 2019									$	-

F-22

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 7 – PROMISSORY NOTES

On December 5, 2017, the Company entered into a promissory note in the amount of $477,402 (C$588,600) with an arm’s length third party. The note was to be repaid no later than 90 days from the date of issuance with an interest rate of 1.75% per 30-day period. The Promissory note was settled in full in February 2018.

On February 1, 2018, the Company entered into two promissory notes in the aggrege amount of $87,000 with arm’s length third parties. The notes were to be repaid on December 31, 2018 with an interest rate of 4% per annum. The promissory notes were settled on September 10, 2018 by issuance of 870,000 common shares of the company (note 9).

On March 20, 2018, the Company entered into a promissory note in the amount of $750,000 with an arm’s length third party. The note was to be repaid on December 31, 2018 with an interest rate of 4% per annum. The Promissory note was settled on September 10, 2018 by issuance of 7,500,000 common shares of the company (note 9).

NOTE 8 – FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

At December 31, 2019, the Company had $21,477 in cash and cash equivalents (December 31, 2018 - $36,075).

	2020		2021 and later
Accounts payable and accrued liabilities	$	710,430	$	—
Due to related party corporations		100,201
	$	810,631	$	—

F-23

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 8 – FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (Continued)

Credit risk: Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. As at December 31, 2019, the Company's credit risk is primarily attributable to cash and cash equivalents and accounts receivable. At December 31, 2019, the Company's cash and cash equivalents were held with reputable Canadian chartered banks. At December 31, 2019, the Company had an allowance for doubtful accounts of $NIL (December 31, 2018 - $192,305) as a result of a review of collectability of the amount outstanding and the duration of time it was outstanding.

Fair values: The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, cash held in trust and customer deposits, accounts receivables, accounts payable and accrued liabilities, promissory note and client funds approximate fair value because of the short period of time between the origination of such instruments and their expected realization.

NOTE 9 – COMMON STOCK, SHARES TO BE ISSUED AND COMMON SHARE PURCHASE WARRANTS

Common Stock, Shares to be issued and Common Share Purchase Warrants

Common Stock

The Company is authorized to issue 500,000,000 common stock with a par value of $0.0001.

During January and April 2019, the company issued 1,500,000 shares of the common stock to an arm’s length third party as compensation for services rendered.

In May 2019, the Company completed various private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 1,038,461 non-registered shares of the Company's common stock was issued for proceeds of $103,846.

During July and August 2019, the Company completed private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 1,000,000 non-registered shares of the Company's common stock was issued for proceeds of $92,308.

Shares to be issued

In December 2019, the Company received $34,091 from an investor and 757,575 non-registered shares of the Company's common stock was issued in January 2020. (note 14)

F-24

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 9 – COMMON STOCK, SHARES TO BE ISSUED AND COMMON SHARE PURCHASE WARRANTS (Continued)

On April 11, 2018, the Company issued 1,500,000 shares of the common stock to a corporation controlled by an officer of the company as compensation for services rendered, and on April 14, 2018, the company issued 1,000,000 shares of the common stock to a current officer of the company who at that time was an arm’s length consultant, as compensation for services rendered. The fair value in amount of $337,250 of these shares was determined by using the market price of the common stock as at the date of issuance. (note 10, note 11)

On September 10, 2018, the Company issued 8,370,000 shares of the common stock to various arm’s length third parties in respect of settlement of promissory notes. (note 7)

On October 17, 2018, the Company issued 44,911,724 shares of the common stock in respect of the assets purchase from Virtublock Global Corp. (note 3)

During November and December, 2018, the Company completed several private placements for the sale of non-registered shares of the Company's common stock. As a result of these private placements 5,450,000 non-registered shares of the Company's common stock was issued for proceeds of $399,483.

Common Share Purchase Warrants

On November 23, 2016, the Company issued 1,471,659 common share purchase warrants to certain individuals. Each warrant was exercisable into one common stock of the Company. 600,000 warrants are exercisable into one common stock of the Company until October 31, 2017, at an exercise price of C$0.50 which reflects the forward split. 871,659 warrants were exercisable to November 30, 2016, at an exercise price of C$0.50, which reflects the forward split. The exercise period was later amended by the Company to March 31, 2017.

F-25

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 9 – COMMON STOCK, SHARES TO BE ISSUED AND COMMON SHARE PURCHASE WARRANTS (Continued)

The 871,659 warrants were assigned a fair value of $647,168 using the Black-Scholes pricing model. The following assumptions were used: Risk free interest rate of – 1.00; expected volatility of 140%, based on comparable companies; expected dividend yield – nil; expected life of 0.02 years. As a result of the amendment of the exercise period, the fair value was adjusted to $652,994 based on the following assumptions: Risk free interest rate of – 1.00; expected volatility of 107%, based on comparable companies; expected dividend yield – nil; expected life of 0.33 years.

As the warrants were not issued in connection with an offering of shares, the fair value has been reflected in the consolidated statement of operations as share-based payment expense.

All warrants issued by the company have expired and as of December 31, 2018, there are no outstanding warrants at December 31, 2019.

NOTE 10 – SHARE-BASED PAYMENTS

During January and April 2019, the Company issued 1,500,000 common shares of the company to an arm’s length third party as compensation for services rendered. The fair value was determined as $227,000 by using the market price of the common stock as at the date of issuance. (note 9, note 11)

During the year ended December 31, 2018, in April 2018, the Company issued 2,500,000 common shares of the company to certain parties including management. The fair value was determined as $337,250 by using the market price of the common stock as at the date of issuance. (note 9, note 11).

On December 13, 2018, the Board of Directors and stockholders, respectively, approved a Stock Incentive Plan (the "Plan"). Awards granted under the plan are up to a maximum of 20,000,000 which can be issued in the form of an Option, Deferred Stock Unit, Dividend Equivalent Right, Deferred Stock, or other right or benefit under the Plan and can be issued to officers, directors, employees and consultants and any individual awardee would be subject to certain maximum grants under the plan. Awards granted would be subject to certain conditions, such as vesting, which is determined by the Board of Directors.

On December 14, 2018, the Company issued 5,400,000 common stock purchase options at an exercise price of C$0.10 to directors, officers, employees and consultants of the Company. These options vested immediately and are exercisable for five years from the grant date. The 5,400,000 stock purchase options were assigned a fair value of $313,504 using the Black-Scholes pricing model. The following assumptions were used: Risk free interest rate of – 2.00; expected volatility of 108%, based on comparable companies; expected dividend yield – nil; expected life of 5 years. During year ended December 31, 2019, the Company cancelled those common stock purchase options.

On August 31, 2017, the Company amended the expiry date of 600,000 warrants, extending them to October 31, 2018, all other terms remained unchanged. These warrants expired on October 31, 2018.

On December 1, 2016, the Company issued 1,480,000 common stock purchase options at an exercise price of C$1.50 to directors, officers, employees and consultants of the Company. 562,500 of these options with a fair value of $493,080 vested immediately and are exercisable for five years from the grant date. 917,500 of the options were exercisable for five years from the grant date at an exercise price of C$1.50 and would vest ratably over a three-year period from the date of grant. Subsequent to the Company’s discontinuation of the two businesses (note 4) during year 2018, employment and services of certain Directors, Officers, Employees and Consultants were terminated, and those stock options vested on December 31, 2016 were expired during year 2018.

F-26

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 10 – SHARE-BASED PAYMENTS (Continued)

On December 1, 2016, the Company issued 460,000 deferred stock units to directors, officers, employees and consultants of the Company and have a life of five years from date of grant. 187,500 of those options with a fair value of $210,961 vested immediately and may be exercised by the recipient. Settlement of the deferred stock unit may be in cash or common stock of the Company at the option of the Company and the remaining 272,500 options would vest ratably over a 36 month period from the grant date. Subsequent to the Company’s discontinuation of the two businesses (note 4) during year 2018, employment and services of certain Directors, Officers, Employees and Consultants were terminated, and those stock options vested on December 31, 2016 were expired during year 2018.

The awards during the year ended December 31, 2019 and 2018, consisted of common stock, stock options and deferred stock units, which were granted to Directors, Officers, Employees and Consultants and is noted in the table below.

The components of share-based payments expense (stock options and warrants) are detailed in the table below.

	Date of grant	Contractual life	Number	Exercise price (C$)	Year ended December 31, 2019 ($)	Year ended December 31, 2018 ($)	Share price (C$)	Risk-free rate	Volatility	Dividend yield	Expected life (years)
Deferred stock unit grant	December 1, 2016	December 1, 2021	917,500	1.50		155,377	1.50	1%	108%	Nil	4
Deferred stock unit grant	December 1, 2016	December 1, 2021	272,500	N/A		57,193	1.50	1%	108%	Nil	4
Warrant amendment	August 31, 2017	October 31, 2018				-	-	-	-	-	-
Share issued for services	April 14, 2018	-	2,500,000	N/A		337,250	0.14	-	-	-	-
Fully vested option grant	December 14, 2018	December 31, 2023	5,400,000	0.10		313,504	0.056	2%	108%	Nil	4
Share issued for services	January 20, 2019	N/A	1,000,000	N/A	177,000	-	0.177	-	-	-	-
Share issued for services	April 20, 2019	N/A	500,000	N/A	50,000	-	0.10	-	-	-	-
					$227,000	$863,324

For year ended December 31, 2018 the Company had the following stock options and deferred stock units.

Award	Fair Value	Contractual Life (years)	Units	Number of units vested	Weighted Average Exercise Price (C$)
Options	493,080	*	562,500	562,500	0.50
Fully vested options	210,961	*	187,500	187,500	-
Deferred stock units	304,405	*	272,500	107,319	-
Deferred stock units	798,517	*	917,500	367,164	0.50
Options	-	-	-	-	-
Total	1,806,963		1,940,000	1,224,483

*Subsequent to the Company’s discontinuation of the two businesses (note 4) during year 2018, employment and services of certain Directors, Officers, Employees and Consultants were terminated. Those stock options and deferred option units from 2016 were expired during 2018.

F-27

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 11 – RELATED PARTY TRANSACTIONS AND BALANCES

During 2018, the Company made advance to two corporations related to the former Chief Executive Officer in the amount of $201,711 in the normal course of operations. At December 31, 2018, the Company assessed this amount for impairment and recorded an impairment loss for the full amount under Office and sundry expenses. During 2019, $163,872 of the impaired amount was recovered and recorded as reversal of impairment under Office and sundry expenses.

The balances of due to related party corporations at December 31, 2019 represent advances from related party corporations which is non-interest bearing, non-secured and due on demand.

As at December 31, 2019 and December 31, 2018, the amounts owing to officers of the Company are recorded in accounts payable and accrued liabilities.

F-28

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 12 – INCOME TAXES

A reconciliation of the differences between the statutory income tax rates for different jurisdictions and the Company's effective tax rate is as follows:

For the year ended December 31, 2019 and December 31, 2018, the Company's long-term combined effective tax rate was 35%.

For the year ended December 31, 2019 For the year ended December 31, 2018

$ $

Net loss before income taxes $ (615,256 ) $ (6,236,176 )

Expected income tax recovery (215,341 ) (2,182,663 )

Impact of tax rate differences in foreign jurisdictions 64,800 783,081

Tax rate changes and other adjustments (4,693 ) 57,356

Permanent differences 47,736 907,896

Change in valuation allowance 107,498 434,330

Total income tax expense $ - $ -

December 31, December 31,

2019 2018

Deferred Tax Items $ $

Net operating loss carry forwards 166,513 166,446

Non-capital loss carry forwards - Canada 1,376,411 1,273,674

Others - (4,694)

Valuation allowance (1,542,924) (1,435,426)

- -

The Company has $138,001 of net operating loss carryforwards in the US expiring in 2036, $440,437 expiring in 2037, $214,173 expiring in 2038 and $322 expiring in 2039. The Company has $912,072 non-capital loss carryforwards in Canada expiring in 2036, $2,258,953 expiring in 2037, $1,634,662 expiring in 2038 and $387,685 expiring in 2039. As of December 31, 2019 and 2018, the Company decided that a valuation allowance relating to the above deferred tax assets of the Company was necessary, largely based on the negative evidence represented by recurring losses incurred and a determination that it is not more likely than not to realize these assets, therefore a corresponding valuation allowance, for each respective period, was recorded to offset deferred tax assets.

F-29

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Commitment

There were no commitments as of December 31, 2019. At December 31, 2018, the Company sub-leased office space under a contract which ran to October 31, 2019.

Contingencies

During the year ended December 31, 2017, the Company learned that a class action complaint (the “Class Action Complaint”) had been filed against the Company, its Chief Executive Officer and its Chief Financial Officer in the United States District Court for the District of New Jersey. The Class Action Complaint alleges, inter alia, that defendants violated the federal securities laws by, among other things, failing to disclose that the Company was engaged in an unlawful scheme to promote its stock. The Company has been served with the Class Action Complaint. The Company has analyzed the Class Action Complaint and, based on that analysis, has concluded that it is legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.

Also during the year ended December 31, 2017, the Company learned that two derivative complaints (the “Derivative Complaints”) on behalf of the Company have been filed against the Company’s Directors and Chief Executive Officer, President, Corporate Secretary, and Chief Financial Officer, and nominally against the Company, in Nevada state and federal court. The state court action subsequently was removed to federal court. The Derivative Complaints allege, inter alia, that the Company’s officers and directors directed the Company to undertake an unlawful scheme to promote its stock. The Company has been served with the Derivative Complaints. The Company has analyzed them and, based on its analysis, has concluded that the Derivative Complaints are legally deficient and otherwise without merit. The Company intends to vigorously defend against these claims.

On August 7, 2018, the United States District Court for the District of New Jersey dismissed the Class Action Complaint. Additionally, subsequent to the year end on August 21, 2018, the Company was served with the Second Amended Complaint in the District of New Jersey. The Company filed a motion to dismiss the Second Amended Complaint on September 18, 2018. On January 23, 2019, the United States District Court for the District of New Jersey dismissed the Second Amended Complaint with prejudice. Plaintiff filed a motion for reconsideration of the dismissal order on February 7, 2019. On May 14, 2019, the Plaintiff’s motion to reconsider was denied. On June 27, 2019, the plaintiffs filed an appeal with United States Court of Appeals for the Third Circuit. On March 12, 2020, the United States Court of Appeal for the Third Circuit dismissed the Third appeal.

The Company was also served with a third derivative action, which was filed March 23, 2018, against the Company’s Directors and Chief Executive Officer, President, and Corporate Secretary, and nominally against the Company, in Nevada state court. Subsequently, this case was removed to federal court.

F-30

ZOOMPASS HOLDINGS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US dollars)

NOTE 14 – SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events up to April 9, 2020, the date the consolidated financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events:

In January 2020, the Company issued 757,575 non-registered shares of the Company's common stock. The net proceeds in amount of $34,091 was received in December 31, 2019. (note 9)

In January 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 3,030,300 non-registered shares of the Company's common stock was issued for gross proceeds of $151,515.

In January 2020, the Company issued 3,319,162 shares of the common stock to settle a debt owed by the company in amount $265,533. The $265,533 debt was owed to a corporation controlled by a former Chief Executive Officer of the company. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance. (note 11)

On February 27, 2020, the Company cancelled 44,911,724 shares of the common stock which were issued in connection with the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. (note 3). Pursuant to a General Release agreement dated November 29, 2019, the asset purchase agreement dated October 17, 2018 with Virtublock Global Corp. was deemed cancelled and each party acknowledged and agreed that no party has or shall have any claim with respect to intellectual property, software or other assets owned by any other party and that no agreements exist or remain unsatisfied with respect to the transfer of any asset from a releasing party to any other party, and Virtublock Global Corp. assigned and tendered the 44,911,724 shares of common stock of the Company to the Company for cancellation. As the share cancellation occurred on February 27, 2020, the accounting recognition of this transaction, consisting of a transfer of $4,492 from common stock to additional paid-in capital and related reduction in the number of common shares outstanding, will be reflected in the consolidated financial statements for the first quarter ended March 31, 2020.

In March 2020, the company issued 1,160,000 shares of the common stock to as compensation for services rendered. The fair value of these shares was determined by using the market price of the common stock as at the date of issuance.

In March 2020, the Company completed a private placement for the sale of non-registered shares of the Company's common stock. As a result of the private placement 300,000 non-registered shares of the Company's common stock will be issued for gross proceeds of $15,000.

Beginning in March 2020, the Governments of Canada and the United States, as well as other foreign governments instituted emergency measures as a result of the COVID-19 virus outbreak. The virus has had a major impact on North America and international securities, currency markets and consumer activity which may impact the Company's financial position, its results of future operations and its future cash flows significantly. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of future operations, financial position, and liquidity in fiscal year 2020.

F-31

	For the year ended December 31, 2019			For the year ended December 31, 2018
	$			$
Net loss before income taxes	$	(615,256	)	$	(6,236,176	)

Expected income tax recovery		(215,341	)		(2,182,663	)
Impact of tax rate differences in foreign jurisdictions		64,800			783,081
Tax rate changes and other adjustments		(4,693	)		57,356
Permanent differences		47,736			907,896
Change in valuation allowance		107,498			434,330
Total income tax expense	$	-		$	-

	December 31,	December 31,
	2019	2018
Deferred Tax Items	$	$
Net operating loss carry forwards	166,513	166,446
Non-capital loss carry forwards - Canada	1,376,411	1,273,674
Others	-	(4,694)
Valuation allowance	(1,542,924)	(1,435,426)
	-	-